(a)This section applies to a county in which
the total amount received by the county (either before July 1, 2015, or
after June 30, 2015) or that will be received by the county from the sale
of a capital asset exceeds fifty million dollars ($50,000,000).
(b)As used in this section, "foundation" means a charitable
nonprofit foundation established under subsection (c).
(c)The county legislative body and the county fiscal body may, by
adopting substantially similar ordinances, establish a charitable
nonprofit foundation to hold some or all of the proceeds of the sale of
the capital asset in trust for the benefit of the county. A county
legislative body and a county fiscal body may adopt ordinances under
this subsection before, after, or at the time of the sale of the capital
asset. The mem
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(a) This section applies to a county in which
the total amount received by the county (either before July 1, 2015, or
after June 30, 2015) or that will be received by the county from the sale
of a capital asset exceeds fifty million dollars ($50,000,000).
(b) As used in this section, "foundation" means a charitable
nonprofit foundation established under subsection (c).
(c) The county legislative body and the county fiscal body may, by
adopting substantially similar ordinances, establish a charitable
nonprofit foundation to hold some or all of the proceeds of the sale of
the capital asset in trust for the benefit of the county. A county
legislative body and a county fiscal body may adopt ordinances under
this subsection before, after, or at the time of the sale of the capital
asset. The members of the county legislative body and the members of
the county fiscal body shall serve as the board of trustees of a
foundation established under this section. A member's term on the
board of trustees expires when the member's term on the county
legislative body or the county fiscal body expires.
(d) The board of trustees of a foundation established under this
section shall contract with investment managers, investment advisors,
investment counsel, trust companies, banks, or other finance
professionals to assist the board in its investment program. Money held
by the foundation must be invested in accordance with the terms of an
investment policy statement developed by the board of trustees with an
investment advisor that:
(1) is approved by the board of trustees; and
(2) complies with the diversification, risk management, and other
fiduciary requirements common to the management of charitable
foundations, including that the funds of the foundation must be
invested according to the prudent investor rule. However, the
investment policy statement may not allow the foundation to
invest in any investments in which the political subdivision that
established the foundation is not permitted to invest under the
Constitution of the State of Indiana.
The investment policy statement must include the limitation on the
investment in equities specified in subsection (f) and may include a
formal spending policy as authorized in subsection (g).
(e) Money held by the foundation:
(1) may be invested in any legal, marketable securities; and
(2) is not subject to any other investment limitations in the law,
other than the limitations under this section and the limitations in
the investment policy statement.
(f) The total amount of the funds invested by a foundation in equity
securities under this section may not exceed fifty-five percent (55%) of
the total value of the portfolio of funds invested by the foundation
under this section. However:
(1) an investment that complies with this subsection when the
investment is made remains legal even if a subsequent change in
the value of the investment or a change in the value of the total
portfolio of funds invested by the foundation causes the
percentage of investments in equity securities to exceed the
fifty-five percent (55%) limit on equity securities; and
(2) if the total amount of the funds invested by a foundation in
equity securities exceeds the fifty-five percent (55%) limit on
equity securities because of a change described in subdivision (1),
the investments by the foundation must be rebalanced to comply
with the fifty-five percent (55%) limit on equity investments not
later than one hundred twenty (120) days after the equity
investments first exceed that limit.
(g) The investment policy statement approved by the board of
trustees under subsection (d) may include a formal spending policy for:
(1) a spending rate of up to five percent (5%) multiplied by a five
(5) year moving average of quarterly market values with the
distributable amount for each year determined on a specified date;
or
(2) in the case of a foundation that was established less than ten
(10) years ago, an interim spending rate of up to five percent (5%)
multiplied by a moving average consisting of all available
quarterly market values since the date the foundation was
established;
to the extent consistent with Section 4942 of the Internal Revenue
Code.
(h) The following apply if a foundation is established under this
section:
(1) The county legislative body shall determine the amount of the
proceeds from the sale of the capital asset that shall be transferred
by the county fiscal officer to the foundation.
(2) The principal amount of the donation to the foundation
consists of the following:
(A) The amount transferred to the foundation under subdivision
(1).
(B) Any donations, gifts, or other money received from any
private source.
(C) Any investment income that is:
(i) earned on the principal of the donation; and
(ii) added to the principal of the donation as provided in
subdivision (3).
(3) To the extent that investment income earned on the principal
amount of the donation 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 section, be added to and be considered a part of
the principal amount of the donation.
(4) An expenditure or transfer of any money that is part of the
principal amount of the donation may be made only upon
unanimous approval of the board of trustees.
(5) The foundation must be audited annually by an independent
third party auditor.
(6) The board of trustees must meet at least quarterly to receive
a quarterly compliance and performance update from the
investment advisor. Three (3) nonvoting advisors who are officers
of different county designated depositories shall attend the
quarterly meetings in an advisory capacity to assist the board of
trustees:
(A) in reviewing the compliance and performance report from
the investment advisor; and
(B) in reviewing the annual audit required by subdivision (5).
The three (3) nonvoting advisors may not vote on any action of
the board of trustees. The board of trustees shall by majority vote
select the three (3) depositories from which the three (3)
nonvoting advisors will be chosen. Each of the three (3)
depositories selected under this subdivision shall select an officer
of the depository to serve as one (1) of the three (3) nonvoting
advisors. Each nonvoting advisor shall serve a term of three (3)
years, and the nonvoting advisor shall continue to serve until a
successor is selected. However, to provide for staggered terms,
the board of trustees shall provide that the initial term of one (1)
nonvoting advisor is one (1) year, the initial term of one (1)
nonvoting advisor is two (2) years, and the initial term of one (1)
nonvoting advisor is three (3) years. For purposes of avoiding a
conflict of interest, a financial institution for which a nonvoting
advisor is an officer (and any affiliate of such a financial
institution) may not receive a commission or other compensation
for investments made by the foundation under this section.