CHAPTER 10.5. STATE INVESTMENTS
IC 5-13-10.5
Chapter 10.5. State Investments
IC 5-13-10.5-1
Applicability of chapter
Sec. 1. This chapter applies to the following funds:
(1) Funds raised by bonds issued for a future specific purpose.
(2) Sinking funds.
(3) Depreciation reserve funds.
(4) Gifts.
(5) Bequests or endowments.
(6) Any other funds available for investment.
As added by P.L.18-1996, SEC.23.
IC 5-13-10.5-2
Authorization for investment and reinvestment of funds
Sec. 2. In addition to any other statutory power to makeinvestments under any other law:
(1) the treasurer of state, under the guidelines established by thestate board of finance; and
(2) any other public officer of the state authorized by statute orcourt order to make investments;
may invest or reinvest funds held by the treasurer of state or otherpublic officer in any combination of the investments authorizedunder this chapter. In making the investment, the public official shallcomply with the requirements in this chapter that apply to theinvestment.
As added by P.L.18-1996, SEC.23.
IC 5-13-10.5-3
Final maturity; percentage of investments outstanding; investmentadvisers and money managers; investment of money fromtransportation corridor fund
Sec. 3. (a) Except as provided in subsection (b), investmentsunder this chapter may be made only in securities having a statedfinal maturity of two (2) years or less from the date of purchase.
(b) The treasurer of state may make investments in securitieshaving a final maturity or redemption date that is more than two (2)years and not more than five (5) years after the date of purchase orsubscription. After an investment is made under this subsection, thetotal investments outstanding under this subsection may not exceedtwenty-five percent (25%) of the total portfolio of funds invested bythe treasurer of state. However, an investment that complies with thissubsection when the investment is made remains legal even if asubsequent decrease in the total portfolio invested by the treasurer ofstate causes the percentage of investments outstanding under thissubsection to exceed twenty-five percent (25%). The treasurer ofstate may contract with federally regulated investment advisers andother institutional money managers to make investments under thissection. (c) Unless prohibited under federal law, the treasurer of state shallinvest under subsection (b) the funds of the transportation corridorfund established by IC 8-4.5-3-7. The treasurer of state may investother funds held by the state in compliance with subsection (b).
As added by P.L.18-1996, SEC.23. Amended by P.L.46-1997,SEC.15; P.L.220-2003, SEC.3; P.L.115-2008, SEC.14.
IC 5-13-10.5-4
Protection of interests of funds
Sec. 4. A public officer making an investment under this chaptermay sell any securities acquired and may take any action necessaryto protect the interests of the funds invested, including the exerciseof exchange privileges that may be granted with respect to maturingsecurities if the new securities offered in exchange meet therequirements for initial investment.
As added by P.L.18-1996, SEC.23.
IC 5-13-10.5-5
Legal custodian; safekeeping receipts
Sec. 5. (a) The treasurer of state is the legal custodian of securitiesunder this chapter. The treasurer of state shall accept safekeepingreceipts or other reporting for securities from:
(1) a duly designated depository as prescribed in this article; or
(2) a financial institution located either in or out of Indianahaving physical custody of securities with a combined capitaland surplus of at least ten million dollars ($10,000,000)according to the last statement of condition filed by thefinancial institution with its governmental supervisory body.
(b) The state board of accounts may rely on safekeeping receiptsor other reporting from any depository or financial institution.
As added by P.L.18-1996, SEC.23.
IC 5-13-10.5-6
Restrictions on public officers
Sec. 6. A public officer of the state may not do the following:
(1) Purchase securities on margin.
(2) Open a securities margin account for the investment ofpublic funds.
As added by P.L.18-1996, SEC.23.
IC 5-13-10.5-7
Investment in securities; cost in excess of par
Sec. 7. (a) A public officer of the state may invest or reinvestfunds held by the officer and available for investment in securitiesthat are:
(1) backed by the full faith and credit of the United StatesTreasury or fully guaranteed by the United States; and
(2) issued by any of the following:
(A) The United States Treasury.
(B) A federal agency. (C) A federal instrumentality.
(D) A federal government sponsored enterprise.
(b) If an investment under subsection (a) is made at a cost inexcess of the par value of the securities purchased, any premium paidfor the securities shall be deducted from the first interest receivedand returned to the fund from which the investment was purchased,and only the net amount is considered interest income.
As added by P.L.18-1996, SEC.23.
IC 5-13-10.5-8
Investment in deposit accounts
Sec. 8. (a) A public officer of the state may invest or reinvestfunds held by the officer and available for investment in depositaccounts issued or offered by a designated depository. Investmentsunder this subdivision by the treasurer of state are governed byIC 5-13-10.
(b) Investments in deposit accounts under subsection (a) must bein the amounts, and for the rates and terms, as are agreed upon fromtime to time by the officer making the investment and the designateddepository.
(c) Investments made in accordance with subsection (a) and theinterest earned or accrued on them are public funds and are coveredby the insurance fund.
As added by P.L.18-1996, SEC.23.
IC 5-13-10.5-9
Investment in repurchase or resale agreements; collateral
Sec. 9. (a) A public officer of the state may invest any funds heldby the officer and available for investment into agreements,commonly known as repurchase or resale agreements withdepositories designated by the state board of finance as depositoriesfor state deposits, involving the purchase and guaranteed resale ofany interest-bearing obligations that are:
(1) issued; or
(2) fully insured or guaranteed;
by the United States, any United States government agency, anyinstrumentality of the United States government, or any federalgovernment sponsored enterprise. The amount of money in this typeof agreement must be fully collateralized by interest-bearingobligations as determined by the current market value computed onthe day on which a transaction is effective.
(b) The collateral for the type of agreement described insubsection (a) is not subject to the maturity limitation in section 3 ofthis chapter.
As added by P.L.18-1996, SEC.23. Amended by P.L.46-1997,SEC.16; P.L.134-2000, SEC.2.
IC 5-13-10.5-10
Investment in obligations issued; assumed or guaranteed by certainbanks or State of Israel Sec. 10. A public officer of the state may invest or reinvest fundsthat are held by the public officer and available for investment inobligations issued, assumed, or guaranteed as to the payment ofprincipal and interest by:
(1) the International Bank for Reconstruction andRedevelopment;
(2) the African Development Bank; or
(3) the State of Israel.
As added by P.L.18-1996, SEC.23. Amended by P.L.220-2003,SEC.4.
IC 5-13-10.5-11
Investment in other obligations
Sec. 11. The treasurer of state may invest or reinvest funds thatare held by the treasurer and that are available for investment inobligations issued by any of the following:
(1) Agencies or instrumentalities of the United Statesgovernment.
(2) Federal government sponsored enterprises.
(3) The Indiana bond bank, if the obligations are secured by taxanticipation time warrants or notes that:
(A) are issued by a political subdivision (as defined inIC 36-1-2-13); and
(B) have a maturity date not later than the end of thecalendar year following the year of issuance.
As added by P.L.18-1996, SEC.23. Amended by P.L.1-2004, SEC.2and P.L.23-2004, SEC.2.
IC 5-13-10.5-11.5
Treasurer of state may invest
Sec. 11.5. The treasurer of state may invest or reinvest funds thatare held by the treasurer and that are available for investment incommercial paper rated in the highest rating category by one (1)nationally recognized rating service and with a stated final maturityof two hundred seventy (270) days or less from the date of purchase.
As added by P.L.220-2003, SEC.5.
IC 5-13-10.5-12
Investment in participations in loans
Sec. 12. (a) The treasurer of state may invest or reinvest any fundsthat are held by the treasurer and available for investment, inparticipations in loans. However, funds may be invested orreinvested in a participation in loans under this subsection only underthe following conditions:
(1) The principal of the participation in loans must beguaranteed by an agency or instrumentality of the United Statesgovernment.
(2) The participation in loans must be represented by acertificate issued by a bank that is:
(A) incorporated under the laws of Indiana, another state, or
the United States; and
(B) insured by the Bank Insurance Fund of the FederalDeposit Insurance Corporation.
(b) Funds may be invested or reinvested in a participation in loansunder subsection (a) even if the certificate representing theparticipation in loans is not insured by the Bank Insurance Fund ofthe Federal Deposit Insurance Corporation.
As added by P.L.18-1996, SEC.23.
IC 5-13-10.5-13
Lending securities
Sec. 13. The treasurer of state may lend any securities acquiredunder section 7 or 11 of this chapter. However, securities may be lentunder this section only if the agreement under which the securitiesare lent is collateralized by:
(1) cash; or
(2) interest bearing obligations that are issued by, fully insuredby, or guaranteed by the United States, an agency of the UnitedStates government, a federal instrumentality, or a federalgovernment sponsored enterprise;
in excess of the total market value of the loaned securities.
As added by P.L.18-1996, SEC.23.
IC 5-13-10.5-14
Designation of fund
Sec. 14. The board of trustees of a state university may designatethe fund to which the interest of its investments shall be receipted.
As added by P.L.18-1996, SEC.23.
IC 5-13-10.5-15
Public depository insurance assessment
Sec. 15. Any public depository insurance assessment paid by adepository on any deposit account of the state under IC 5-13-12-5shall be deducted from the interest otherwise payable on thataccount.
As added by P.L.18-1996, SEC.23.
IC 5-13-10.5-16
Interest from investments
Sec. 16. Interest from the investment of the public funds of thestate may not be paid personally or for the benefit of any publicofficer.
As added by P.L.18-1996, SEC.23.
IC 5-13-10.5-17
Service charge
Sec. 17. Any public officer of the state that makes a deposit in anydeposit or other account may be required to pay a service charge tothe depository in which the funds are deposited, if the depositoryrequires all customers to pay the charge for providing that service. If
the total service charge cannot be computed before the investment,the investing officer of the state shall estimate the service charge andadjust the interest rate based on this estimate. The service chargemay be paid by direct charge to the deposit or other account or in anyother manner mutually agreed upon by the investing officer and thedepository.
As added by P.L.18-1996, SEC.23.
IC 5-13-10.5-18
Investment in capital improvement board; application; terms ofinvestment
Sec. 18. (a) As used in this section, "capital improvement board"refers to a capital improvement board established under IC 36-10-9.
(b) To qualify for an investment under this section, the capitalimprovement board must apply to the treasurer of state in the formand manner required by the treasurer. As part of the application, thecapital improvement board shall submit a plan for its use of theinvestment proceeds and for the repayment of the capitalimprovement board's obligation to the treasurer. Within sixty (60)days after receipt of each application, the treasurer shall consider theapplication and review its accuracy and completeness.
(c) If the capital improvement board makes an application undersubsection (b) and the treasurer approves the accuracy andcompleteness of the application and determines that there is anadequate method of payment for the capital improvement board'sobligations, the treasurer of state shall invest or reinvest funds thatare held by the treasurer and that are available for investment inobligations issued by the capital improvement board for the purposesof the capital improvement board in calendar years 2009, 2010, and2011. The investment may not exceed nine million dollars($9,000,000) per calendar year for 2009, 2010, and 2011.
(d) The treasurer of state shall determine the terms of eachinvestment and the capital improvement board's obligation, whichmust include the following:
(1) The duration of the capital improvement board's obligation,which must be for a term of ten (10) years with an option for thecapital improvement board to pay its obligation to the treasurerearly without penalty.
(2) The repayment schedule of the capital improvement board'sobligation, which must provide that no payments are due beforeJanuary 1, 2013.
(3) A rate of interest to be determined by the treasurer.
(4) The amount of each investment, which may not exceed themaximum amounts established for the capital improvementboard by this section.
(5) Any other conditions specified by the treasurer.
(e) The capital improvement board may issue obligations underthis section by adoption of a resolution and, as set forth in IC 5-1-14,may use any source of revenue to satisfy the obligation to thetreasurer of state under this section. This section constitutes complete
authority for the capital improvement board to issue obligations tothe treasurer. If the capital improvement board fails to make anypayments on the capital improvement board's obligation to thetreasurer, the amount payable shall be withheld by the auditor ofstate from any other money payable to the capital improvementboard. The amount withheld shall be transferred to the treasurer tothe credit of the capital improvement board.
As added by P.L.182-2009(ss), SEC.78.