Bill Text: IN SB0541 | 2013 | Regular Session | Introduced
Bill Title: Unemployment insurance bonds.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2013-01-14 - First reading: referred to Committee on Appropriations [SB0541 Detail]
Download: Indiana-2013-SB0541-Introduced.html
Citations Affected: IC 4-4-11-15; IC 22-4-2-9; IC 22-4-44;
IC 34-30-2-87.3.
Synopsis: Unemployment insurance bonds. Provides for the issuance
of bonds to return advances received from the federal unemployment
trust fund before July 1, 2013. Grants the Indiana finance authority the
power to issue the bonds and to administer the obligation trust fund.
Provides that an assessment to retire the bonds requires a separate act
by the general assembly after a determination is made that the bonds
may be issued.
Effective: Upon passage; July 1, 2013.
January 14, 2013, read first time and referred to Committee on Appropriations.
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or
A BILL FOR AN ACT to amend the Indiana Code concerning
unemployment.
(1) Have perpetual succession as a body politic and corporate and an independent instrumentality exercising essential public functions.
(2) Without complying with IC 4-22-2, adopt, amend, and repeal bylaws, rules, guidelines, and policies not inconsistent with the affected statutes, and necessary or convenient to regulate its affairs and to carry into effect the powers, duties, and purposes of the authority and conduct its business under the affected statutes. These bylaws, rules, guidelines, and policies must be made by a resolution of the authority introduced at one (1) meeting and approved at a subsequent meeting of the authority.
(3) Sue and be sued in its own name.
(4) Have an official seal and alter it at will.
(5) Maintain an office or offices at a place or places within the state as it may designate.
(6) Make, execute, and enforce contracts and all other instruments necessary, convenient, or desirable for the purposes of the authority or pertaining to:
(A) a purchase, acquisition, or sale of securities or other investments; or
(B) the performance of the authority's duties and execution of any of the authority's powers under the affected statutes.
(7) Employ architects, engineers, attorneys, inspectors, accountants, agriculture experts, silviculture experts, aquaculture experts, and financial experts, and such other advisors, consultants, and agents as may be necessary in its judgment and to fix their compensation.
(8) Procure insurance against any loss in connection with its property and other assets, including loans and loan notes in amounts and from insurers as it may consider advisable.
(9) Borrow money, make guaranties, issue bonds, and otherwise incur indebtedness for any of the authority's purposes, and issue debentures, notes, or other evidences of indebtedness, whether secured or unsecured, to any person, as provided by the affected statutes. Notwithstanding any other law, the:
(A) issuance by the authority of any indebtedness that establishes a procedure for the authority or a person acting on behalf of the authority to certify to the general assembly the amount needed to restore a debt service reserve fund or another fund to required levels; or
(B) execution by the authority of any other agreement that creates a moral obligation of the state to pay all or part of any indebtedness issued by the authority;
is subject to review by the budget committee and approval by the budget director.
(10) Procure insurance or guaranties from any public or private entities, including any department, agency, or instrumentality of the United States, for payment of any bonds issued by the authority, including the power to pay premiums on any insurance or reinsurance.
(11) Purchase, receive, take by grant, gift, devise, bequest, or otherwise, and accept, from any source, aid or contributions of money, property, labor, or other things of value to be held, used,
and applied to carry out the purposes of the affected statutes,
subject to the conditions upon which the grants or contributions
are made, including but not limited to gifts or grants from any
department, agency, or instrumentality of the United States, and
lease or otherwise acquire, own, hold, improve, employ, use, and
otherwise deal in and with real or personal property or any
interest in real or personal property, wherever situated, for any
purpose consistent with the affected statutes.
(12) Enter into agreements with any department, agency, or
instrumentality of the United States or this state and with lenders
and enter into loan agreements, sales contracts, and leases with
contracting parties, including participants (as defined in
IC 13-11-2-151.1) for any purpose permitted under IC 13-18-13
or IC 13-18-21, borrowers, lenders, developers, or users, for the
purpose of planning, regulating, and providing for the financing
and refinancing of any agricultural enterprise (as defined in
IC 5-28-31-1), rural development project (as defined in
IC 5-28-31-20), industrial development project, purpose permitted
under IC 13-18-13 and IC 13-18-21, or international exports, and
distribute data and information concerning the encouragement
and improvement of agricultural enterprises and agricultural
employment, rural development projects, industrial development
projects, international exports, and other types of employment in
the state undertaken with the assistance of the authority under this
chapter.
(13) Enter into contracts or agreements with lenders and lessors
for the servicing and processing of loans and leases pursuant to
the affected statutes.
(14) Provide technical assistance to local public bodies and to
profit and nonprofit entities in the development or operation of
agricultural enterprises, rural development projects, and industrial
development projects.
(15) To the extent permitted under its contract with the holders of
the bonds of the authority, consent to any modification with
respect to the rate of interest, time, and payment of any
installment of principal or interest, or any other term of any
contract, loan, loan note, loan note commitment, contract, lease,
or agreement of any kind to which the authority is a party.
(16) To the extent permitted under its contract with the holders of
bonds of the authority, enter into contracts with any lender
containing provisions enabling it to reduce the rental or carrying
charges to persons unable to pay the regular schedule of charges
when, by reason of other income or payment by any department,
agency, or instrumentality of the United States of America or of
this state, the reduction can be made without jeopardizing the
economic stability of the agricultural enterprise, rural
development project, or industrial development project being
financed.
(17) Notwithstanding IC 5-13, but subject to the requirements of
any trust agreement entered into by the authority, invest:
(A) the authority's money, funds, and accounts;
(B) any money, funds, and accounts in the authority's custody;
and
(C) proceeds of bonds or notes;
in the manner provided by an investment policy established by
resolution of the authority.
(18) Fix and revise periodically, and charge and collect, fees and
charges as the authority determines to be reasonable in connection
with:
(A) the authority's loans, guarantees, advances, insurance,
commitments, and servicing; and
(B) the use of the authority's services or facilities.
(19) Cooperate and exchange services, personnel, and information
with any federal, state, or local government agency, or
instrumentality of the United States or this state.
(20) Sell, at public or private sale, with or without public bidding,
any loan or other obligation held by the authority.
(21) Enter into agreements concerning, and acquire, hold, and
dispose by any lawful means, land or interests in land, building
improvements, structures, personal property, franchises, patents,
accounts receivable, loans, assignments, guarantees, and
insurance needed for the purposes of the affected statutes.
(22) Take assignments of accounts receivable, loans, guarantees,
insurance, notes, mortgages, security agreements securing notes,
and other forms of security, attach, seize, or take title by
foreclosure or conveyance to any industrial development project
when a guaranteed loan thereon is clearly in default and when in
the opinion of the authority such acquisition is necessary to
safeguard the industrial development project guaranty fund, and
sell, or on a temporary basis, lease or rent such industrial
development project for any use.
(23) Expend money provided to the authority by the Indiana
economic development corporation from the industrial
development project guaranty fund created by IC 5-28-30, subject
to the terms of any agreement with the Indiana economic
development corporation governing the expenditure of that
money.
(24) Purchase, lease as lessee, construct, remodel, rebuild,
enlarge, or substantially improve industrial development projects,
including land, machinery, equipment, or any combination
thereof.
(25) Lease industrial development projects to users or developers,
with or without an option to purchase.
(26) Sell industrial development projects to users or developers,
for consideration to be paid in installments or otherwise.
(27) Make direct loans from the proceeds of the bonds to users or
developers for:
(A) the cost of acquisition, construction, or installation of
industrial development projects, including land, machinery,
equipment, or any combination thereof; or
(B) eligible expenditures for an educational facility project
described in IC 4-4-10.9-6.2(a)(2);
with the loans to be secured by the pledge of one (1) or more
bonds, notes, warrants, or other secured or unsecured debt
obligations of the users or developers.
(28) Lend or deposit the proceeds of bonds to or with a lender for
the purpose of furnishing funds to such lender to be used for
making a loan to a developer or user for the financing of industrial
development projects under this chapter.
(29) Enter into agreements with users or developers to allow the
users or developers, directly or as agents for the authority, to
wholly or partially construct industrial development projects to be
leased from or to be acquired by the authority.
(30) Establish reserves from the proceeds of the sale of bonds,
other funds, or both, in the amount determined to be necessary by
the authority to secure the payment of the principal and interest on
the bonds.
(31) Adopt rules and guidelines governing its activities authorized
under the affected statutes.
(32) Use the proceeds of bonds to make guaranteed participating
loans.
(33) Purchase, discount, sell, and negotiate, with or without
guaranty, notes and other evidences of indebtedness.
(34) Sell and guarantee securities.
(35) Make guaranteed participating loans under IC 4-4-21-26.
(36) Procure insurance to guarantee, insure, coinsure, and
reinsure against political and commercial risk of loss, and any
other insurance the authority considers necessary, including
insurance to secure the payment of principal and interest on notes
or other obligations of the authority.
(37) Provide performance bond guarantees to support eligible
export loan transactions, subject to the terms of the affected
statutes.
(38) Provide financial counseling services to Indiana exporters.
(39) Accept gifts, grants, or loans from, and enter into contracts
or other transactions with, any federal or state agency,
municipality, private organization, or other source.
(40) Sell, convey, lease, exchange, transfer, or otherwise dispose
of property or any interest in property, wherever the property is
located.
(41) Cooperate with other public and private organizations to
promote export trade activities in Indiana.
(42) Cooperate with the Indiana economic development
corporation in taking any actions necessary for the administration
of the agricultural loan and rural development project guarantee
fund established by IC 5-28-31.
(43) In cooperation with the Indiana economic development
corporation, take assignments of notes and mortgages and security
agreements securing notes and other forms of security, and attach,
seize, or take title by foreclosure or conveyance to any
agricultural enterprise or rural development project when a
guaranteed loan to the enterprise or rural development project is
clearly in default and when in the opinion of the Indiana
economic development corporation the acquisition is necessary to
safeguard the agricultural loan and rural development project
guarantee fund, and sell, or on a temporary basis, lease or rent the
agricultural enterprise or rural development project for any use.
(44) Expend money provided to the authority by the Indiana
economic development corporation from the agricultural loan and
rural development project guarantee fund created by IC 5-28-31,
subject to the terms of any agreement with the Indiana economic
development corporation governing the expenditure of that
money.
(45) Reimburse from bond proceeds expenditures for industrial
development projects under this chapter.
(46) Acquire, hold, use, and dispose of the authority's income,
revenues, funds, and money.
(47) Purchase, acquire, or hold debt securities or other
investments for the authority's own account at prices and in a
manner the authority considers advisable, and sell or otherwise
dispose of those securities or investments at prices without
relation to cost and in a manner the authority considers advisable.
(48) Fix and establish terms and provisions with respect to:
(A) a purchase of securities by the authority, including dates
and maturities of the securities;
(B) redemption or payment before maturity; and
(C) any other matters that in connection with the purchase are
necessary, desirable, or advisable in the judgment of the
authority.
(49) To the extent permitted under the authority's contracts with
the holders of bonds or notes, amend, modify, and supplement any
provision or term of:
(A) a bond, a note, or any other obligation of the authority; or
(B) any agreement or contract of any kind to which the
authority is a party.
(50) Subject to the authority's investment policy, do any act and
enter into any agreement pertaining to a swap agreement (as
defined in IC 8-9.5-9-4) related to the purposes of the affected
statutes in accordance with IC 8-9.5-9-5 and IC 8-9.5-9-7,
whether the action is incidental to the issuance, carrying, or
securing of bonds or otherwise.
(51) Do any act necessary or convenient to the exercise of the
powers granted by the affected statutes, or reasonably implied
from those statutes, including but not limited to compliance with
requirements of federal law imposed from time to time for the
issuance of bonds.
(52) Sell bonds and enter into agreements with the
department of workforce development and an instrumentality
of the United States to carry out the purposes of IC 22-4-44.
(b) The authority's powers under this chapter shall be interpreted
broadly to effectuate the purposes of this chapter and may not be
construed as a limitation of powers. The omission of a power from the
list in subsection (a) does not imply that the authority lacks that power.
The authority may exercise any power that is not listed in subsection
(a) but is consistent with the powers listed in subsection (a) to the
extent that the power is not expressly denied by the Constitution of the
State of Indiana or by another statute.
(c) This chapter does not authorize the financing of industrial
development projects for a developer unless any written agreement that
may exist between the developer and the user at the time of the bond
resolution is fully disclosed to and approved by the authority.
(d) The authority shall work with and assist the Indiana housing and
community development authority established by IC 5-20-1-3, the ports
of Indiana established under IC 8-10-1-3, and the state fair commission
established by IC 15-13-2-1 in the issuance of bonds, notes, or other
indebtedness. The Indiana housing and community development
authority, the ports of Indiana, and the state fair commission shall work
with and cooperate with the authority in connection with the issuance
of bonds, notes, or other indebtedness.
Chapter 44. Advances From Federal Trust Fund and Financing
Sec. 1. (a) The general assembly makes the following findings of fact:
(1) It is an essential governmental function to maintain funds in an amount sufficient to pay unemployment benefits when due.
(2) At the time of the enactment of this chapter, obtaining advances from the federal government was the only option available to obtain sufficient funds to pay benefits when the balance in the fund is depleted.
(3) Alternative methods of replenishing the fund may reduce the costs of providing unemployment benefits and employers' cost of doing business in Indiana.
(4) Funds representing revenues received from any unemployment obligation assessment that may be authorized and any income from the investment of those funds are not state property.
(b) The purpose of this chapter is to provide appropriate methods through which the state may continue the unemployment compensation program at the lowest possible cost to the state and
employers in Indiana.
Sec. 2. As used in this chapter, "authority" means the Indiana
finance authority established by IC 4-4-11-4.
Sec. 3. As used in this chapter, "bond" means any type of
revenue obligation, including a bond, note, certificate, or other
instrument, payable from and secured by a pledge of revenues
received from the unemployment obligation assessment and
amounts on deposit in the obligation trust fund established by
section 18 of this chapter to the extent provided in the proceedings
authorizing the obligation.
Sec. 4. As used in this chapter, "bond administrative expenses"
means expenses incurred to administer bonds issued under this
chapter, including fees for paying agents, trustees, and attorneys,
and for other professional services necessary to ensure compliance
with applicable state or federal law.
Sec. 5. As used in this chapter, "bond obligations" means the
principal of a bond and any premium and interest on a bond issued
under this chapter, together with any amount owed under a related
credit agreement.
Sec. 6. As used in this chapter, "credit agreement" means a loan
agreement, a revolving credit agreement, an agreement
establishing a line of credit, a letter of credit, an interest rate swap
agreement, an interest rate lock agreement, a currency swap
agreement, a forward payment conversion agreement, an
agreement to provide payments based on levels of or changes in
interest rates or currency exchange rates, an agreement to
exchange cash flows or a series of payments, an option, put, or call
to hedge payment, currency, interest rate, or other exposure, or
another agreement that enhances the marketability, security, or
creditworthiness of a bond issued under this chapter.
Sec. 7. An amount owed by the authority under a credit
agreement must be payable from and secured by a pledge of
revenues received from the unemployment obligation assessment
and amounts on deposit in the obligation trust fund to the extent
provided in the proceedings authorizing the credit agreement.
Sec. 8. (a) If the general assembly determines that the issuance
of bonds is:
(1) necessary to refinance an advance received before July 1,
2011, by the department under Section 1201 of the federal
Social Security Act (42 U.S.C. 1321) or any similar federal
law; and
(2) the most cost effective method of returning an advance;
the department may request the authority to issue bonds on its
behalf. Before making a request of the authority under this
subsection, the department must by resolution determine that the
issuance of bonds for the purposes established by this section will
result in a savings to the state and to employers in Indiana as
compared with returning the advance as otherwise required by
federal law.
(b) The department shall specify in the department's request to
the authority the maximum principal amount of the bonds, not to
exceed two billion dollars ($2,000,000,000) for any separate bond
issue, and the maximum term of the bonds, not to exceed twenty
(20) years.
(c) The principal amount determined by the department under
subsection (b) may be increased to include an amount sufficient to:
(1) pay the costs of issuance of the authority;
(2) provide a bond reserve fund; and
(3) capitalize interest for the period determined necessary by
the department, not to exceed two (2) years.
Sec. 9. (a) The authority shall issue bonds on request by the
department, in accordance with IC 4-4.
(b) The authority shall determine the method of sale, type of
bond, bond form, maximum interest rates, and other terms of the
bonds that, in the authority's judgment, best achieve the economic
goals of the department and effect the borrowing at the lowest
practicable cost.
(c) The authority may enter into a credit agreement in
connection with the bonds.
Sec. 10. (a) The proceeds of bonds issued by the authority under
this chapter may be deposited with a trustee selected by the
authority and the department or held by the authority in a
dedicated trust fund outside the state treasury in the custody of the
authority.
(b) Bond proceeds, including investment income, shall be held
in trust for the exclusive use and benefit of the department. The
department may use the proceeds to:
(1) repay the principal and interest of previous advances from
the federal trust fund;
(2) pay the costs of issuing the bonds;
(3) provide a bond reserve; and
(4) pay capitalized interest on the bonds for the period
determined necessary by the department, not to exceed two
(2) years.
(c) Any excess money remaining after the purposes for which
the bonds were issued are satisfied may be used to purchase or
redeem outstanding bonds.
(d) If there are no outstanding bonds or bond interest to be paid,
the remaining proceeds shall be transferred to the fund.
Sec. 11. (a) The authority shall obtain a legal opinion, including
a court judgment if necessary, setting forth a determination that
bonds may be issued under this chapter. Before bonds may be
issued under this chapter, the general assembly must enact a law
providing for an unemployment obligation assessment. The law
must provide that an assessment continues so long as there are any
bonds issued under this chapter still outstanding.
(b) The general assembly shall set the unemployment obligation
assessment rate in an amount sufficient to ensure timely payment
of the bond obligations, including administrative expenses, and to
provide an amount necessary in the general assembly's judgment
to enhance investor acceptance of the bonds.
(c) Revenue from the unemployment obligation assessment
under this section shall be deposited to the credit of the obligation
trust fund under section 18 of this chapter.
(d) With regard to outstanding bonds issued by the authority
under this chapter, the authority shall notify the department of the
amount of the bond obligations and the estimated amount of bond
administrative expenses each year in sufficient time, as determined
by the department, to permit the department to administer the
unemployment obligation assessment, subject to verification by a
financial adviser of the department or as otherwise specified by the
authority.
(e) The department shall transfer to the authority all revenue
collected from the unemployment obligation assessment for deposit
into the obligation trust fund. Money deposited in the obligation
trust fund may be invested as permitted by IC 4-4-11-15. Money in
the obligation trust fund required to be used to pay bond
obligations and bond administrative expenses shall be transferred
to the authority or used in the manner and at the time specified in
the resolution adopted in connection with the bond issue to ensure
timely payment of obligations and expenses, or as otherwise
provided by the bond documents.
(f) For bonds issued by the authority under this chapter, the
department shall provide for the payment of the bond obligations
and the bond administrative expenses by irrevocably pledging
revenues received from the unemployment obligation assessment,
as provided in the proceedings authorizing the bonds and related
credit agreements.
Sec. 12. (a) Revenues received from the unemployment
obligation assessment may be applied only as provided by this
chapter.
(b) The authority may pay bond obligations with other legally
available funds.
Sec. 13. Revenue collected from the unemployment obligation
assessment in any year that exceeds the amount of the bond
obligations and bond administrative expenses payable in that year
and interest earned on the obligation trust fund may, in the
discretion of the authority, be:
(1) used to pay bond obligations payable in the subsequent
year, offsetting the amount of the assessment that would
otherwise have to be levied for the year under this chapter; or
(2) used to redeem or purchase outstanding bonds.
Sec. 14. (a) A bond issued under this chapter, and any related
credit agreement, is not a debt of the state or any state agency or
political subdivision of the state and is not a pledge of the faith and
credit of any of them. A bond or credit agreement is payable solely
from revenue as provided by this chapter.
(b) A bond, and any related credit agreement, issued under this
chapter must contain on its face a statement to the effect that:
(1) neither the state nor a state agency, political corporation,
or political subdivision of the state is obligated to pay the
principal of or interest on the bond except as provided by this
chapter; and
(2) neither the faith and credit nor the taxing power of the
state or any state agency, political corporation, or political
subdivision of the state is pledged to the payment of the
principal of or interest on the bond.
Sec. 15. If bonds under this chapter are outstanding, the state
may not:
(1) take action to limit or restrict the rights of the department
or authority to fulfill its responsibility to pay bond
obligations; or
(2) in any way impair the rights and remedies of the bond
owners until the bonds are fully discharged.
Sec. 16. A bond issued under this chapter, any transaction
relating to the bond, and profits made from the sale of the bond are
exempt from taxation by the state or by a political subdivision of
the state.
Sec. 17. The members of the department, department employees, the board of directors of the authority, and the employees of the authority are not personally liable as a result of exercising the rights and responsibilities granted under this chapter.
Sec. 18. (a) The obligation trust fund is established as a dedicated trust fund outside the state treasury in the custody of the authority. The obligation trust fund is composed of revenue received under section 11 of this chapter.
(b) The authority and governor may use money in the obligation trust fund without appropriation to pay:
(1) bond obligations and bond administrative expenses; and
(2) principal and interest incurred on advances from the federal trust fund.
Sec. 19. An amount that is attributable to the part of the unemployment obligation assessment authorized by section 11 of this chapter may not be transferred to the fund unless all bond obligations, including bond administrative expenses, have been fully paid and satisfied. After the obligations have been fully satisfied, the authority shall transfer the balance of the obligation trust fund to the fund.
