Introduced Version
SENATE BILL No. 408
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 28-1-11-14.
Synopsis: Community investments by financial institutions. Amends
the statute authorizing a bank or trust company to make investments in
community based economic development to also authorize investments
in: (1) any community and economic development entity, community
development project, or other public welfare investment; and (2) tax
equity finance transactions; subject to the investments being made in
compliance with applicable federal regulations and any regulation, rule,
policy, or guidance adopted by the department of financial institutions.
Effective: July 1, 2022.
Zay
January 12, 2022, read first time and referred to Committee on Insurance and Financial
Institutions.
2022 IN 408—LS 6818/DI 101 Introduced
Second Regular Session of the 122nd General Assembly (2022)
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 this style type.
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 this style type reconciles conflicts
between statutes enacted by the 2021 Regular Session of the General Assembly.
SENATE BILL No. 408
A BILL FOR AN ACT to amend the Indiana Code concerning
financial institutions.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 28-1-11-14, AS AMENDED BY P.L.73-2016,
2 SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2022]: Sec. 14. (a) As used in this section, "community based
4 economic development" refers to activities that seek to address
5 economic development through affordable housing development or the
6 rehabilitation of qualified rehabilitated buildings or certified historic
7 structures, or that seeks to address economic causes of poverty within
8 specific geographic areas, revitalizing the economic and social base of
9 low income communities through activities that include:
10 (1) small business and micro-enterprise support;
11 (2) commercial, industrial, and retail revitalization, retention, and
12 expansion;
13 (3) capacity development and technical assistance support for
14 community development corporations;
15 (4) employment and training efforts;
16 (5) human resource development; and
17 (6) social service enterprises.
2022 IN 408—LS 6818/DI 101 2
1 (b) As used in this section, "community development corporation"
2 means a private, nonprofit corporation:
3 (1) whose board of directors is comprised primarily of community
4 representatives and business, civic, and community leaders; and
5 (2) whose principal purpose includes the provision of:
6 (A) housing;
7 (B) community based economic development projects; and
8 (C) social services;
9 that primarily benefit low-income individuals and communities.
10 (c) As used in this section, "capital and surplus" has the meaning set
11 forth in IC 28-1-1-3(10).
12 (d) As used in this section, "community and economic
13 development entity" has the meaning set forth in 12 CFR 24.2(c).
14 (e) As used in this section, "community development project"
15 has the meaning set forth in 12 CFR 24.2(d).
16 (f) As used in this section, "public welfare investment" means
17 any investment permitted by 12 CFR 24.3.
18 (g) As used in this section, "tax equity finance transaction" has
19 the meaning set forth in 12 CFR 7.1025(b)(3).
20 (d) (h) Subject to the limitations of this section, other laws, and any
21 regulation, rule, policy, or guidance adopted by the department
22 concerning investments in community based economic development,
23 any bank or trust company may invest directly or indirectly in equity
24 investments in a corporation, a limited partnership, a limited liability
25 company, or another entity organized as:
26 (1) a community development corporation;
27 (2) an entity formed primarily to support community based
28 economic development;
29 (3) an entity qualifying for the new markets tax credits under 26
30 U.S.C. 45D;
31 (4) an entity approved by the director as being formed for a
32 predominantly civic, community, or public purpose and that:
33 (A) primarily benefits low and moderate income individuals;
34 (B) primarily benefits low and moderate income areas;
35 (C) primarily benefits areas targeted for redevelopment by a
36 government entity; or
37 (D) is a qualified investment under 12 CFR 25.23 for purposes
38 of the Community Reinvestment Act of 1977 (12 U.S.C. 2901
39 et seq.); or
40 (5) an entity making qualified rehabilitation expenditures with
41 respect to a qualified rehabilitated building or certified historic
42 structure, as such terms are defined in section 47 of the Internal
2022 IN 408—LS 6818/DI 101 3
1 Revenue Code of 1986 or a similar state historic tax credit
2 program, as provided for in Section 619(d)(1)(E) of the
3 Dodd-Frank Wall Street Reform and Consumer Protection Act
4 (12 U.S.C. 1851(d)(1)(E)).
5 (i) Subject to any regulation, rule, policy, or guidance adopted
6 by the department, any bank or trust company may invest directly
7 or indirectly in any:
8 (1) community and economic development entity;
9 (2) community development project; or
10 (3) other public welfare investment;
11 as long as the investment is in compliance with 12 CFR 24.
12 (j) Subject to any regulation, rule, policy, or guidance adopted
13 by the department concerning investments in tax equity finance
14 transactions, any bank or trust company may invest directly or
15 indirectly in any tax equity finance transaction as long as:
16 (1) in the case of a national bank or federal savings
17 association, the investment is in compliance with 12 CFR
18 7.1025; or
19 (2) in the case of a bank or trust company, the investment is
20 in compliance with 12 CFR 7.1025(a), 12 CFR 7.1025 (b), and
21 12 CFR 7.1025(c).
22 (e) (k) Except as provided in subsection (f), (l), the aggregate of all
23 equity investments by a bank or trust company under subsection (d)
24 subsections (h), (i), and (j) may not exceed:
25 (1) five percent (5%) of the capital and surplus of the bank or
26 trust company without the prior written approval of the director;
27 and
28 (2) fifteen percent (15%) of the capital and surplus of the bank or
29 trust company under any circumstances.
30 (f) (l) In determining whether to permit the aggregate of all equity
31 investments by a bank or trust company under subsection (d)
32 subsections (h), (i), and (j) to exceed five percent (5%) of the capital
33 and surplus of the bank or trust company under subsection (e)(1),
34 (k)(1), the director shall consider whether:
35 (1) the aggregate of all equity investments under subsection (d)
36 subsections (h), (i), and (j) will pose a significant risk to the
37 affected deposit insurance fund; and
38 (2) the bank or trust company is adequately capitalized.
39 (g) (m) A bank or trust company shall not make any investment
40 under this section if the investment would expose the bank or trust
41 company to unlimited liability.
2022 IN 408—LS 6818/DI 101