CHAPTER 30. INDUSTRIAL DEVELOPMENT LOAN GUARANTY PROGRAM
IC 5-28-30
Chapter 30. Industrial Development Loan Guaranty Program
IC 5-28-30-1
"Broadband development project"
Sec. 1. As used in this chapter, "broadband development project"means a project authorized by the broadband development programunder IC 8-1-33.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-1.5
"Developer"
Sec. 1.5. As used in this chapter, "developer" means a person whoproposes to enter, or has entered, into a financing agreement with thecorporation for an industrial development project and who hasentered into a separate agreement with some other persons for thesubstantial use of the facilities financed.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-2
"Guaranty fund"
Sec. 2. As used in this chapter, "guaranty fund" refers to theindustrial development project guaranty fund created by section 9 ofthis chapter.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-3
"Guaranty program"
Sec. 3. As used in this chapter, "guaranty program" means theprogram described in section 10 of this chapter under which thecorporation guarantees parts of particular mortgages, securityagreements, leases, or loans for working capital with funds availablefrom the guaranty fund.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-4
"High growth company with high skilled jobs"
Sec. 4. As used in this chapter, "high growth company with highskilled jobs" means a company that satisfies all the followingconditions:
(1) The company:
(A) had at least a fifteen percent (15%) average annualgrowth in company earnings during the past three (3) years;
(B) is entering a new product or process area; or
(C) is classified in an industry that had at least a fifteenpercent (15%) average annual growth in earnings during thepast three (3) years.
(2) The company has a substantial number of employees injobs:
(A) requiring postsecondary education or its equivalent; or (B) that are in occupational codes classified as high skill bythe Bureau of Labor Statistics, United States Department ofLabor.
(3) The company has a substantial number of employees thatearn at least one hundred fifty percent (150%) of Indiana percapita personal income.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-5
"Industrial development project"
Sec. 5. As used in this chapter, "industrial development project"includes the acquisition of land, interests in land, site improvements,infrastructure improvements (including information and hightechnology infrastructure (as defined in IC 5-28-9-4)), buildings, orstructures, rehabilitation, renovation, and enlargement of buildingsand structures, machinery, equipment, furnishings, or facilities (orany combination of these), comprising or being functionally relatedand subordinate to any of the following:
(1) A pollution control facility (as defined in IC 4-4-10.9-24).
(2) A manufacturing enterprise.
(3) A business service enterprise involved in:
(A) computer and data processing services; or
(B) commercial testing services.
(4) A business enterprise the primary purpose of which is theoperation of an education and permanent marketing center formanufacturers and distributors of robotic and flexibleautomation equipment.
(5) Any other business enterprise, if the use of the guarantyprogram creates a reasonable probability that the effect onIndiana employment will be creation or retention of at least fifty(50) jobs.
(6) An agricultural enterprise in which:
(A) the enterprise operates under a producer or growoutagreement; and
(B) the output of the enterprise is processed predominantlyin Indiana.
(7) A business enterprise that is required by a state, federal, orlocal regulatory agency to make capital expenditures to remedya violation of a state or federal law or a local ordinance.
(8) A recycling market development project.
(9) A high growth company with high skilled jobs.
(10) A broadband development project.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-6
"Maturity date"
Sec. 6. As used in this chapter, "maturity date" means the date onwhich the mortgage or security agreement indebtedness, or leaseobligations, would be extinguished if paid in accordance withperiodic payments provided for in the mortgage, security agreement,
or lease.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-7
"Mortgage"
Sec. 7. As used in this chapter, "mortgage" means a mortgage onan industrial development project, mining operation, or agriculturaloperation that involves the processing of agricultural products, or theunpaid purchase price of real estate under the laws of this state,together with the credit instruments, if any, secured thereby,including but not limited to a financing agreement as defined inIC 4-4-10.9-8 or a financing agreement within the meaning ofIC 36-7-12 in connection with real property.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-8
"Security agreement"
Sec. 8. As used in this chapter, "security agreement" means anagreement which creates or provides for a security interest inequipment, including, but not limited to, an equipment lease underthe guaranty program or within the meaning of IC 36-7-12, and anysuccessor provisions related to equipment.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-8.5
"User"
Sec. 8.5. As used in this chapter, "user" means a person who hasentered into a financing agreement with the corporation or lender ora contract for use with the developer or lender in contemplation of itsuse of an industrial development project.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-9
Industrial development project guaranty fund
Sec. 9. There is created an industrial development projectguaranty fund which shall be used by the corporation as anonlapsing, revolving fund for carrying out the provisions of theguaranty program. The corporation may expend money from theguaranty fund as the authority considers appropriate to carry out thepurposes of this chapter and IC 4-4-11. The guaranty fund consistsof the money, if any, appropriated by the general assembly. To thissum shall be charged those expenses of the corporation attributableand allocated by the corporation to the guaranty program, includinginterest, principal, and lease payments required by loan or leasedefaults under the guaranty program, and to the sum shall be creditedthat income of the corporation attributable and allocated by thecorporation to the guaranty program, including guarantee premiums.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-10
Power to guarantee loans and leases
Sec. 10. Subject to the conditions set forth in section 11 of thischapter and the other provisions of this chapter, if the corporationmakes a written finding that:
(1) the guarantee of a particular loan secured by, or lease of,real property or tangible or intangible personal property to orfor the benefit of any industrial development project, miningoperation, or agricultural operation that involves the processingof agricultural products would tend to accomplish the purposesof this chapter, including the creation or retention ofemployment in Indiana through the guarantee of the loan orlease; and
(2) the proposed borrower or lessee cannot obtain the loan orlease upon reasonable terms;
the corporation may, under the guaranty program, guarantee the loanor lease upon the terms and conditions prescribed by the corporation.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-11
Conditions
Sec. 11. The conditions referred to in section 10 of this chapterare as follows:
(1) A new or additional guarantee of a loan or lease undersection 10, 12, or 17 of this chapter may not be entered into ifthe guarantee would cause the outstanding total guaranteeobligations with respect to all loans and leases guaranteed undersections 10, 12, and17 of this chapter to exceed eight (8) timesthe amount of money in the guaranty fund.
(2) The amount of all guarantees by the corporation of loans orleases to or for the benefit of any single industrial developmentproject, mining operation, or agricultural operation that involvesthe processing of agricultural products may not exceed twomillion dollars ($2,000,000), less the outstanding total principalbalance under any loans made and owed to the corporationunder section 17 of this chapter to or for the benefit of theproject or operation.
(3) A guarantee of either a loan secured by real estate or a realestate lease may not exceed ninety percent (90%) of the unpaidprincipal balance of the loan from time to time outstanding orninety percent (90%) of the amount of any lease payment, asapplicable, or ninety percent (90%) of the appraised fair marketvalue of the real estate, whichever is less.
(4) A guarantee of a loan secured by personal property or of apersonal property lease may not exceed seventy-five percent(75%) of the unpaid principal balance of the loan from time totime outstanding or seventy-five percent (75%) of the amountof any lease payment, as applicable, or seventy-five percent(75%) of the fair market value of the personal property,whichever is less. (5) A guarantee involving both real estate and personal propertymay not exceed the percentage proportionate to each type ofproperty.
(6) To be eligible for a guarantee under section 10 of thischapter, a loan or lease must:
(A) be one that is to be made to and held by a lender orlessor approved by the corporation as responsible and ableto service the loan or lease properly;
(B) involve a principal obligation or lease payments, asapplicable, which may include initial service charges andappraisal, inspection, and other fees approved by thecorporation;
(C) have a maturity or term satisfactory to the corporationbut in no case later than twenty (20) years from the date ofthe guarantee;
(D) contain payment terms satisfactory to the corporationrequiring periodic payments by the developer or user,including principal and interest payments, cost of localproperty taxes and assessments, land lease rentals, if any,insurance on the property, as applicable, and any guaranteepremiums required by the corporation; and
(E) contain any terms and provisions with respect toproperty insurance, repairs, alterations, payment of taxes andassessments, default reserves, delinquency charges, defaultremedies, anticipation of maturity, additional and secondaryliens, and other matters that the corporation may prescribe.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-12
Power to guarantee an unsecured loan
Sec. 12. The corporation may guarantee an unsecured loan for:
(1) working capital purposes, if the corporation determines,under criteria that it establishes, that the loan for workingcapital:
(A) is for an industrial development project, a miningoperation, or an agricultural operation that involves theprocessing of agricultural products; and
(B) will lead directly to increased production or job creationor retention through sales of products or provision ofservices to federal, state, or local government, privatebusinesses, or individuals, or through exports to foreignmarkets; or
(2) capital expenditures, if the corporation determines, undercriteria that the corporation establishes, that the loan is for anindustrial development project described in IC 5-28-30-5(7).
The loan guarantee may not exceed five hundred thousand dollars($500,000) for any single project or operation, and may be inaddition to any other guarantees of the corporation under thischapter. The guarantee terms must include a time limit for workingcapital loan guarantees that may not exceed eighteen (18) months.
However, the guarantees are renewable. A loan guarantee may notexceed eighty percent (80%) of the unpaid principal balance fromtime to time outstanding of the loan being guaranteed. Thecorporation may impose any additional terms it considers appropriatefor any particular project or operation.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-13
Premiums; fees; charges
Sec. 13. The corporation may establish:
(1) guarantee premiums for a guarantee under section 10 of thischapter of any loan or lease outstanding at the beginning ofeach year or at the time the guarantee is entered into; and
(2) loan application, placement, origination, commitment,administrative, processing, or other fees or charges inconnection with the corporation's powers under section 17 ofthis chapter.
These premiums, fees, or charges are payable in amounts or basedupon formulas established by the corporation and may be payable, atthe election of the corporation, in whole or in part, in the form ofcash, shares of stock, warrants for the purchase of shares of stock, orother securities, property, or rights acceptable to the corporation.These premiums, fees, or charges shall be payable by the developeror user to the corporation in a manner prescribed by the corporation.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-14
Letters of credit
Sec. 14. Any guarantee made by the corporation under thischapter may be effected or enhanced, in whole or in part, through theprovision by the corporation of a letter of credit or an equivalentform of credit enhancement instrument. However, the maximumprincipal payment obligations of the corporation under the creditinstrument, as the same may be effective from time to time, is theamount of the guarantee or portion of the guarantee made under thischapter, and for purposes of the limitations on the amount ofguarantees under this chapter, and the term of any letter of credit maynot exceed the respective terms established for guarantees or loansunder this chapter.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-15
Legal investments
Sec. 15. Notwithstanding any other law, loans or leasesguaranteed or made by the corporation are legal investments for allinsurance companies, trust companies, banks, investment companies,savings banks, executors, trustees and other fiduciaries, and pensionor retirement funds, as well as the board for depositories.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-16
Power to allow subordination
Sec. 16. To further the purposes of this chapter, and subject to thischapter, the corporation may also use any part of the guaranty fundto guarantee any bonds issued by the Indiana finance authority underIC 4-4-11 or by any authorized issuer under IC 36-7-12. With regardto direct obligations of the authority that are guaranteed by thecorporation, the corporation may permit a subordination of any:
(1) security agreement;
(2) mortgage;
(3) combination of security agreements and mortgages; or
(4) other appropriate documents securing the direct obligations;
if the corporation in its discretion determines that the subordinationis reasonably necessary to accomplish the objectives of the industrialdevelopment project undertaken by the authority.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-17
Power to make direct loans
Sec. 17. To further the purposes of this chapter, and in addition tothe corporation's other powers under this chapter, the corporationmay, upon a written finding as described in section 10 of thischapter, make direct loans from money in the guaranty fund to or forthe benefit of any industrial development project, mining operation,or agricultural operation that involves the processing of agriculturalproducts, upon the terms and conditions that the corporationprescribes. Loans made under this section are subject to thefollowing conditions:
(1) A new or additional loan may not be made if the loan wouldcause the then outstanding total guarantee obligations withrespect to all loans and leases guaranteed under this section andthe other provisions of this chapter to exceed eight (8) times theamount of money then in the guaranty fund, or would cause thethen outstanding total principal balance of all loans made underthis section and then owing to the corporation to exceed twentypercent (20%) of the amount of money then in the guarantyfund.
(2) The principal amount of such a loan to or for the benefit ofa project or operation may not exceed one million dollars($1,000,000), less the then outstanding total guaranteeobligations with respect to any loans or leases guaranteed underthis chapter to or for the benefit of that project or operation.
(3) With respect to any loan made under this section, a loanagreement with the corporation must contain the followingterms:
(A) A requirement that the loan proceeds be used forspecified purposes consistent with and in furtherance of thepurposes of the corporation under this chapter.
(B) The term of the loan, which may not be later than twenty(20) years from the date of the loan. (C) The repayment schedule.
(D) The interest rate or rates of the loan, which may includevariations in the rate, but which may not be less than theamount necessary to cover all expenses of the corporation inmaking the loan.
(E) Any other terms and provisions that the corporationrequires.
(4) A loan agreement under this section may also contain arequirement that the loan be insured directly or indirectly by aloan insurer or be guaranteed by a loan guarantor, and arequirement of any other type or types of security or collateralthat the corporation considers reasonable or necessary.
(5) A loan made under this section may be sold by thecorporation, and the corporation may permit other lenders toparticipate in a loan made under this section, at the time ortimes and upon the terms and conditions that the corporationconsiders reasonable or necessary. A loan sold or in which otherlenders participate may be guaranteed by the corporation, uponterms and conditions established by the corporation.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-18
Proceeds of sales
Sec. 18. All proceeds received by the corporation or the Indianafinance authority from the disposal by sale or in some other mannerof property acquired in connection with the guaranty program orotherwise under this chapter shall be credited to the guaranty fund.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-19
Expense; reimbursement by borrower
Sec. 19. Upon the issuance of a loan or a guarantee of a loan orlease, any expenses incurred by the corporation in connection withthe loan or guarantee or the projects or operations for which the loanor guarantee is being made shall be reimbursed to the corporation bythe borrower, in the case of a loan (to the extent not provided forunder section 13 of this chapter), or by the borrower, lender, lessee,or lessor, in the case of a guarantee of a loan or lease, from theproceeds of the loan or the payments under the lease or otherwise.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-20
Transfer of funds to the capital access account
Sec. 20. To further the purposes of this chapter and IC 4-4-11, andin addition to the corporation's other powers under this chapter, thecorporation may transfer funds from the guaranty fund to the capitalaccess account established under IC 5-28-29-35.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-21
Exemption from securities registration laws
Sec. 21. Any guarantees by the corporation under the guarantyprogram are exempt from the registration and other requirements ofIC 23-19 and any other securities registration laws.
As added by P.L.162-2007, SEC.25. Amended by P.L.1-2009,SEC.25.
IC 5-28-30-22
Power to procure insurance
Sec. 22. The corporation may procure insurance or guaranteesfrom any public or private entities, including any department,agency, or instrumentality of the United States, for insurance orreinsurance on amounts paid from the guaranty fund.
As added by P.L.162-2007, SEC.25.
IC 5-28-30-23
Powers in the event of default
Sec. 23. The corporation may take assignments of accountsreceivable, loans, guarantees, insurance, notes, mortgages, securityagreements securing notes, and other forms of security, attach, seize,or take title by foreclosure or conveyance to any industrialdevelopment project when a guaranteed loan on the project is clearlyin default and when in the opinion of the authority such anacquisition is necessary to safeguard the guaranty fund, and sell, oron a temporary basis, lease or rent the project for any use.
As added by P.L.162-2007, SEC.25.