§ 5-1.5-8-5 — Department or agency of state as custodian of money payable to qualified entity; duty on default on payment of principal or interest by qualified entity

Indiana § 5-1.5-8-5

• Jurisdiction: Indiana
• Title 5: STATE AND LOCAL ADMINISTRATION
• Art. 1.5: INDIANA BOND BANK
• Ch. 8: Loans to Qualified Entities

Text

(a) Notwithstanding any other provision of law,
to the extent that any department or agency of the state, including the
treasurer of state, is the custodian of money payable to the qualified
entity (other than for goods or services provided by the qualified
entity), at any time after written notice to the department or agency
head from the bank that the qualified entity is in default on the payment
of principal or interest on the securities of the qualified entity then held
or owned by or arising from an agreement with the bank, the
department or agency shall withhold the payment of that money from
that qualified entity and pay over the money to the bank for the purpose
of paying principal of and interest on bonds of the bank. However, the
withholding of payment from the qualified entity and payment to the
bank under this section must not adversely affect the validity of the
security in default.
(b) This subsection applies to securities of a qualified entity
acquired by the bank, or arising from an agreement entered into with
the bank, on or after March 1, 2016. Upon receiving notice from the
bank that a qualified entity has failed to pay when due the principal or
interest on the securities of the qualified entity then held or owned by
or arising from an agreement with the bank, the fiscal officer (as
defined in IC 36-1-2-7) of the county, for any county in which the
qualified entity is wholly or partially located, shall do the following:
(1) Reduce the amount of any revenues or other money or
property that:
(A) is held, possessed, maintained, controlled, or otherwise in
the custody of the county or a department, an agency, or an
instrumentality of the county; and
(B) would otherwise be available for distribution to the
qualified entity under any other law;
by an amount equal to the amount of the qualified entity's unpaid
securities.
(2) Pay the amount by which the revenues or other money or
property is reduced under subdivision (1) to the bank to pay the
principal of and interest on bonds or other obligations of the bank.
(3) Notify the qualified entity that the revenues or other money or
property, which would otherwise be available for distribution to
the qualified entity, has been reduced by an amount necessary to
satisfy all or part of the qualified entity's unpaid securities to the
bank.
(c) This subsection applies to securities of a qualified entity
acquired by the bank, or arising from an agreement with the bank, that
is covered by subsection (b). A reduction under subsection (b) must be
made as follows:
(1) First, from local income tax distributions under IC 6-3.6-9 that
would otherwise be distributed to the qualified entity under the
schedules in IC 6-3.6-9-12 and IC 6-3.6-9-16.
(2) Second, from any other revenues or other money or property
that:
(A) is held, possessed, maintained, or controlled by, or
otherwise in the custody of, the county or a department, an
agency, or an instrumentality of the county; and
(B) would otherwise be available for distribution to the
qualified entity under any other law.

Legislative History

As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.26; P.L.46-1987, SEC.16; P.L.47-2016, SEC.1.