Indiana § 5-13-9-12 - Local government investment pool board; members; establishment of policies

§ 5-13-9-12. Local government investment pool board; members; establishment of policies

Note: This version of section effective until 7-1-2027. See also following version of this section, effective 7-1-2027.

Sec. 12. (a) As used in this section, "board" refers to the Indiana local government investment pool board established by subsection (c).

(b) As used in this section, "investment pool" refers to the local government investment pool established by section 11(b) of this chapter.

(c) The Indiana local government investment pool board is established as a continuing board under the executive branch of state government. The purpose of the board is to establish policies for the investment of funds contributed to the investment pool.

(d) The board consists of the following seven (7) members:

(1) The treasurer of state.

(2) The director of the Indiana department of financial institutions.

(3) Two (2) members with practical experience with financial institutions, local government or public finance, or financial investments domiciled in Indiana, appointed by the president pro tempore of the senate.

(4) Two (2) members with practical experience with financial institutions, local government or public finance, or financial investments domiciled in Indiana, appointed by the speaker of the house of representatives.

(5) One (1) member with practical experience with financial institutions, local government or public finance, or financial investments domiciled in Indiana, appointed by the governor.

(e) A member appointed under subsection (d)(3), (d)(4), or (d)(5) serves a term of four (4) years and may be reappointed by the appointing authority.

(f) A member appointed under subsection (d)(1) or (d)(2) who ceases to hold the office or qualification described in that subsection ceases to be a member of the board.

(g) The governor shall designate one (1) of the members as chairperson. The chairperson has one (1) vote on all matters voted on by the members.

(h) A member of the board who is appointed under subsection (d)(3), (d)(4), or (d)(5) serves a term that ends June 30 of the odd-numbered year four (4) years after appointment.

(i) The board shall meet at least four (4) times a year and at the call of the chairperson.

(j) Five (5) members of the board constitute a quorum. The affirmative votes of four (4) members are required to take any action.

(k) Each member of the board who is not a state employee is entitled to the minimum salary per diem provided by IC 4-10-11-2.1(b) for each day that the member is engaged in the official business of the board. The member is also entitled to reimbursement for mileage, traveling expenses, and other expenses actually incurred in connection with the member's duties, as provided in the state travel policies and procedures established by the Indiana department of administration and approved by the budget agency.

(l) The expenses of the board shall be paid from the investment pool.

(m) The board shall establish policies regarding how the treasurer of state shall administer and invest the funds in the investment pool. The policies must provide the following:

(1) There is not a minimum time for which funds paid into the investment pool must be retained by the investment pool.

(2) There is not a limit on the number of accounts that the state or a unit of government participating in the investment pool may establish within the investment pool.

(3) The investment pool shall be audited at least annually by an independent auditing firm, with an electronic or paper copy of the audit provided to the state and each unit of government participating in the pool.

(4) Not less than fifty percent (50%) of funds available for investment shall be deposited in banks qualified to hold deposits of participating local government entities.

(n) The board may select and direct the treasurer of state to contract with accountants, attorneys, regulated investment advisors, money managers, and other finance and investment professionals to make investments and provide for the public accounting and legal compliance necessary to ensure and maintain the safety, liquidity, and yield of the investment pool.

As added by P.L.213-2025, SEC.63.

IC 5-13-9-12Local government investment pool board; members; establishment of policies Note: This version of section effective 7-1-2027. See also preceding version of this section, effective until 7-1-2027.

Sec. 12. (a) As used in this section, "board" refers to the Indiana local government investment pool board established by subsection (c).

(b) As used in this section, "investment pool" refers to the local government investment pool established by section 11(b) of this chapter.

(c) The Indiana local government investment pool board is established as a continuing board under the executive branch of state government. The purpose of the board is to establish policies for the investment of funds contributed to the investment pool.

(d) The board consists of the following seven (7) members:

(1) The treasurer of state, or the treasurer of state's designee.

(2) The director of the Indiana department of financial institutions.

(3) Two (2) members with practical experience with financial institutions, local government or public finance, or financial investments domiciled in Indiana, appointed by the president pro tempore of the senate.

(4) Two (2) members with practical experience with financial institutions, local government or public finance, or financial investments domiciled in Indiana, appointed by the speaker of the house of representatives.

(5) One (1) member with practical experience with financial institutions, local government or public finance, or financial investments domiciled in Indiana, appointed by the governor.

(e) A member appointed under subsection (d)(3), (d)(4), or (d)(5) serves a term of four (4) years and may be reappointed by the appointing authority.

(f) A member appointed under subsection (d)(1) or (d)(2) who ceases to hold the office or qualification described in that subsection ceases to be a member of the board.

(g) The members of the board shall elect a chairperson at the first meeting each year. The member elected chairperson serves a one (1) year term as chairperson. The chairperson has one (1) vote on all matters voted on by the members.

(h) A member of the board who is appointed under subsection (d)(3), (d)(4), or (d)(5) serves a term that ends June 30 of the odd-numbered year four (4) years after appointment.

(i) The board shall meet at least four (4) times a year and at the call of the chairperson.

(j) Five (5) members of the board constitute a quorum. The affirmative votes of four (4) members are required to take any action.

(k) Each member of the board who is not a state employee is entitled to the minimum salary per diem provided by IC 4-10-11-2.1(b) for each day that the member is engaged in the official business of the board. The member is also entitled to reimbursement for mileage, traveling expenses, and other expenses actually incurred in connection with the member's duties, as provided in the state travel policies and procedures established by the Indiana department of administration and approved by the budget agency.

(l) The expenses of the board shall be paid from the investment pool.

(m) The board shall establish policies regarding how the treasurer of state shall administer and invest the funds in the investment pool. The policies must provide the following:

(1) There is not a minimum time for which funds paid into the investment pool must be retained by the investment pool.

(2) There is not a limit on the number of accounts that the state or a unit of government participating in the investment pool may establish within the investment pool.

(3) The investment pool shall be audited at least annually by an independent auditing firm, with an electronic or paper copy of the audit provided to the state and each unit of government participating in the pool.

(4) Not less than fifty percent (50%) of funds available for investment shall be deposited in banks qualified to hold deposits of participating local government entities.

(n) The board may select and direct the treasurer of state to contract with accountants, attorneys, regulated investment advisors, money managers, and other finance and investment professionals to make investments and provide for the public accounting and legal compliance necessary to ensure and maintain the safety, liquidity, and yield of the investment pool.

As added by P.L.213-2025, SEC.63. Amended by P.L.152-2026, SEC.40.

IC 5-13-9.1Chapter 9.1. RepealedRepealed by P.L.1-2002, SEC.172.

IC 5-13-9.3Chapter 9.3. Investment of Proceeds Received From the Sale of Certain Capital Assets

5-13-9.3-1"Capital asset" 5-13-9.3-2"Fund" 5-13-9.3-3Investment of proceeds from certain capital assets; ordinance or resolution 5-13-9.3-4Establishment of separate fund; investment powers; agreement with investment advisor; expenditure or transfer of money in the fund 5-13-9.3-5Principal and interest of money in the fund; appropriation required; limits 5-13-9.3-6Department of local government finance may not reduce levy

IC 5-13-9.3-1"Capital asset" Sec. 1. As used in this chapter, "capital asset" means a building, a fixture, a structure, an improvement, or land.

As added by P.L.139-2015, SEC.2.

IC 5-13-9.3-2"Fund" Sec. 2. As used in this chapter, "fund" means a fund established under section 4 of this chapter.

As added by P.L.139-2015, SEC.2.

IC 5-13-9.3-3Investment of proceeds from certain capital assets; ordinance or resolution Sec. 3. (a) Subject to the requirements of this chapter, the fiscal body of a political subdivision may adopt an ordinance (in the case of a county or municipality) or a resolution (in the case of any other political subdivision) to authorize the investment of proceeds from the sale of a capital asset owned by the political subdivision. A fiscal body may adopt an ordinance under this subsection before, after, or at the time of the sale of the capital asset.

(b) Proceeds from the sale of a capital asset owned by a political subdivision may be invested as provided in this chapter only if:

(1) either:

(A) the total amount received (either before July 1, 2015, or after June 30, 2015) or that will be received from the sale of the capital asset exceeds fifty million dollars ($50,000,000); or

(B) in the case of a town, the total amount received from the sale of the capital asset after December 15, 2021, and before January 1, 2023, exceeds twenty-four million dollars ($24,000,000) but does not exceed twenty-six million dollars ($26,000,000); and

(2) the fiscal body of the political subdivision has adopted an ordinance or a resolution, as described in subsection (a), that applies to the investment of proceeds from the sale of that particular capital asset.

As added by P.L.139-2015, SEC.2. Amended by P.L.157-2022, SEC.1.

IC 5-13-9.3-4Establishment of separate fund; investment powers; agreement with investment advisor; expenditure or transfer of money in the fund Sec. 4. (a) Except as provided in subsection (d), if the fiscal body of a political subdivision adopts an ordinance or a resolution under section 3 of this chapter for a particular capital asset, the fiscal officer of the political subdivision shall establish a separate fund into which some or all of the proceeds from the sale of the capital asset shall be deposited. All interest and other income earned on investments of money in the fund shall be deposited in the fund. The ordinance or resolution under section 3 of this chapter must require that the investing officer of the political subdivision shall contract with a registered investment advisor concerning the investment of the proceeds in the fund with the expanded investment authority granted to the political subdivision under this section.

(b) Notwithstanding this article or any other law, the investing officer of the political subdivision may invest money in the fund in the same manner as money in the next generation trust fund may be invested under IC 8-14-15.2-9(b). A political subdivision shall enter into an agreement with a registered investment advisor to provide advice regarding investment of money in the fund. The political subdivision shall, with the advice of the registered investment advisor, enter into agreements with investment managers for the investment of the funds. These agreements:

(1) must be a fee-for-service agreement; and

(2) may not provide that the compensation of the investment management professionals or investment advisors is determined in whole or in part by the amount or percentage of the investment income earned on money in the fund.

(c) Money in the fund may not be expended or transferred from the fund, except as provided in this chapter.

(d) This subsection applies only to a town that receives proceeds from the sale of a capital asset under section 3(b)(1)(B) of this chapter. The fiscal body of a town that receives proceeds from the sale of a capital asset described in section 3(b)(1)(B) of this chapter shall contract with a financial institution eligible to receive public funds of a political subdivision under IC 5-13-8-1 to assist the fiscal body in its investment program.

As added by P.L.139-2015, SEC.2. Amended by P.L.189-2018, SEC.33; P.L.157-2022, SEC.2; P.L.11-2023, SEC.21.

IC 5-13-9.3-5Principal and interest of money in the fund; appropriation required; limits Sec. 5. The following apply to money deposited in the fund:

(1) The principal of the fund consists of:

(A) the amount deposited in the fund as the proceeds from the sale of the capital asset; plus

(B) any investment income that is:

(i) earned on money in the fund; and

(ii) added to the principal of the fund as provided in subdivision (2).

(2) To the extent that investment income earned on money in the fund during a calendar year exceeds five percent (5%) of the amount of the principal at the beginning of the calendar year, that excess investment income shall, for purposes of this chapter, be added to and be considered a part of the principal of the fund.

(3) Money may be expended from the fund only upon appropriation by the fiscal body of the political subdivision. Money may be transferred from the fund to another fund of the political subdivision only if the fiscal body of the political subdivision authorizes the transfer by ordinance (in the case of a county or municipality) or by resolution (in the case of any other political subdivision). However, an expenditure or transfer of any money that is part of the principal of the fund may be made only if the expenditure or transfer is approved:

(A) by each member of the fiscal body of the political subdivision; and

(B) by each member of the executive of the political subdivision.

(4) All money in the fund that is in a deposit account and not in some other form of investment shall be deposited in one (1) or more designated depositories of the political subdivision in the same manner as other public funds of the political subdivision are deposited under IC 5-13-9.

As added by P.L.139-2015, SEC.2.

IC 5-13-9.3-6Department of local government finance may not reduce levy Sec. 6. The department of local government finance may not reduce a political subdivision's property tax levy under IC 6-1.1-18.5 or any other law on account of money deposited in a fund established under this chapter.

As added by P.L.139-2015, SEC.2.

IC 5-13-9.5Chapter 9.5. Designation of State Depositories

5-13-9.5-1Application by financial institution to be state depository; ineligibility; certificate 5-13-9.5-2Consideration of applications 5-13-9.5-3Designation of qualified financial institutions as depositories 5-13-9.5-4Expiration of designation as depository 5-13-9.5-5Filing copy of institution's statement of condition 5-13-9.5-6Revocation of commission of depository; causes 5-13-9.5-7Resignation of depository 5-13-9.5-8Forms

IC 5-13-9.5-1Application by financial institution to be state depository; ineligibility; certificate Sec. 1. (a) A financial institution may at any time file an application to become a depository and receive public funds of the state on deposit. Except as provided in IC 5-13-8-1 and IC 5-13-8-7, designation of a depository to receive public funds of the state qualifies a depository to receive public funds of a political subdivision. Applications for the state board of finance must be filed with the treasurer of state. The treasurer shall submit each 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 either of the following applies:

(1) The institution fails to maintain a capital ratio in excess of the minimum required by the governmental supervisory body of the institution. However, the requirement set forth in this subdivision does not apply if the institution has fully collateralized the institution's public funds on deposit by pledging and delivering acceptable collateral to the board for depositories, or to the board's agent, in accordance with IC 5-13-13 and with any applicable rules of the board.

(2) The institution has been found by the department of financial institutions under IC 28-1-2-40, or the financial institution's primary federal regulator, to not be in substantial compliance with the federal Credit Card Accountability Responsibility and Disclosure Act of 2009 as it applies to Indiana borrowers.

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. If necessary, a determination of the ratio described in subdivision (1) 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;

is at least equal to the total amount of public funds of the state and political subdivisions of the state that are on deposit in the depository.

The board may rely on a certificate furnished under this subsection in determining whether to deposit public funds or reinvest public funds in the institution.

As added by P.L.18-1996, SEC.22. Amended by P.L.46-1997, SEC.14; P.L.115-2010, SEC.12; P.L.147-2011, SEC.2; P.L.202-2011, SEC.2.

IC 5-13-9.5-2Consideration of applications Sec. 2. The state board of finance shall consider all applications of financial institutions filed with the state board of finance.

As added by P.L.18-1996, SEC.22.

IC 5-13-9.5-3Designation of qualified financial institutions as depositories Sec. 3. (a) The state board of finance shall designate as a depository for public funds of the state any financial institution qualified under section 1 of this chapter that:

(1) properly files an application to receive a deposit of public funds of the state and to provide the security required by IC 5-13-13-7; and

(2) is suitably located with reference to the convenience of the officers and state institutions using that financial institution.

(b) The state board of finance may invite and act upon applications and designate depositories at any time when additional depositories may be available or are required for the state or a political subdivision.

As added by P.L.18-1996, SEC.22.

IC 5-13-9.5-4Expiration of designation as depository Sec. 4. When the state board of finance has designated a depository for public funds, the treasurer of state shall accept the application of the financial institution to act as a depository for public funds. A designation under this section expires only under the following conditions:

(1) The board of depositories revokes the status of the financial institution as a depository under section 6 of this chapter.

(2) The financial institution resigns as a depository under section 7 of this chapter.

(3) Another law terminates the depository status of the financial institution.

As added by P.L.18-1996, SEC.22.

IC 5-13-9.5-5Filing copy of institution's statement of condition Sec. 5. A financial institution designated as a depository under this chapter shall, upon request of the treasurer of state, file a copy of the institution's most recent statement of condition.

As added by P.L.18-1996, SEC.22.

IC 5-13-9.5-6Revocation of commission of depository; causes Sec. 6. (a) The board for depositories regarding depositories of public funds of the state may revoke the commission of any depository at any time for any cause considered sufficient by the board for depositories.

(b) The causes for which the board for depositories may revoke the commission of a depository under subsection (a) include the failure of the depository to conduct lending activities in Indiana to such an extent that, at the end of each quarter, pursuant to the depository's certification, the sum of:

(1) the total principal amount of the depository's outstanding loans to Indiana residents (as defined in IC 5-13-8-7); plus

(2) the total value of the depository's investments in Indiana residents (as defined in IC 5-13-8-7);

is at least equal to the total amount of public funds of the state and political subdivisions of the state that are on deposit in the depository.

(c) Upon revocation, the depository shall immediately render an accounting and make settlement for all public funds deposited with the depository.

As added by P.L.18-1996, SEC.22.

IC 5-13-9.5-7Resignation of depository Sec. 7. Any depository designated under this chapter may resign as a depository and relinquish all public funds on deposit with the depository. The resignation is effective:

(1) thirty (30) days after written notice is given to the state board of finance; and

(2) after settlement with the state board of finance for all public funds on deposit with the depository.

As added by P.L.18-1996, SEC.22.

IC 5-13-9.5-8Forms Sec. 8. (a) The state board of accounts, with the approval of the attorney general, shall prepare and prescribe:

(1) a form of agreement to receive public funds on deposit that may be accepted and executed, as provided in this chapter; and

(2) any other forms necessary to carry out this chapter.

(b) These forms must be used by the state board of finance and depositories in the performance of the duties imposed upon the state board of finance by this chapter. All agreements and the rights of the parties must be subject to modification by any statute and by all rules adopted by the department of financial institutions concerning withdrawal of funds in times of emergency.

As added by P.L.18-1996, SEC.22.

IC 5-13-10Chapter 10. Funds Invested by the Treasurer of State

5-13-10-1Excess funds; deposit in deposit accounts 5-13-10-2Deposit accounts; interest rate requirement 5-13-10-3Deposit accounts; limitations on deposit; depository to file periodic statement of condition; increase of maximum percentage in depository on finding of excess cash 5-13-10-4Publication of average daily balance of funds; audit of records 5-13-10-5Interest to be receipted to general fund 5-13-10-6Payment of interest accruing on state held school funds to school corporations