First Regular Session of the 123rd General Assembly (2023)
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 2022 Regular Session of the General Assembly.
HOUSE ENROLLED ACT No. 1581
AN ACT to amend the Indiana Code concerning business and other
associations.
Be it enacted by the General Assembly of the State of Indiana:
SECTION 1. IC 15-12-1-2, AS ADDED BY P.L.2-2008, SECTION
3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1,
2023]: Sec. 2. The definitions in IC 23-0.5 and IC 23-1 apply to this
chapter to the extent they do not conflict with the definitions in this
chapter.
SECTION 2. IC 15-12-1-12, AS AMENDED BY P.L.118-2017,
SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 12. (a) The incorporators of an association to be
formed under this chapter shall execute and file articles of
incorporation setting forth the following:
(1) The name of the proposed association.
(2) The purpose or purposes for which it is formed.
(3) The period during which it is to continue to exist, if the period
is to be limited.
(4) The post office address of its principal office and the name
and address of its registered agent as provided in IC 23-0.5-4.
(5) If organized without capital stock, whether the property rights
and interest of the members are equal or unequal. If property
rights and interest of the members are unequal, the articles of
incorporation must set forth the provisions under and by which
the property rights and interests of the respective members are to
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be determined and fixed.
(6) The following information, if the association is organized with
capital stock:
(A) The total number of shares that the association may issue.
(B) Whether all or part of the shares have a par value.
(C) If all or part of the shares have a par value, the number and
par value of the shares.
(D) Whether all or part of the shares are without a par value.
(E) If all or part of the shares are without a par value, the
number of shares without a par value.
(F) If the shares are to be divided into classes or kinds:
(i) the number and par value, if any, of the shares of each
class; and
(ii) subject to the limitations provided in this chapter with
respect to issuance of voting stock, either a statement of the
relative rights, preferences, limitations, and restrictions of
each class, or a provision expressly vesting authority in the
board of directors to determine the relative rights,
preferences, limitations, and restrictions of each class by
resolution or resolutions adopted before the issuance of any
shares of the specific class.
(G) If the shares of any class are to be issuable in series:
(i) descriptions of the several series; and
(ii) subject to the limitation provided in this chapter with
respect to the issuance of voting stock, a statement of the
relative rights, preferences, limitations, and restrictions of
each series, or a provision expressly vesting authority in the
board of directors to determine the relative rights,
preferences, limitations, and restrictions of each series by
resolution or resolutions adopted before the issuance of any
of the shares of the specific series.
(7) The number of directors constituting the initial board of
directors of the association.
(8) The names and post office addresses of the first board of
directors.
(9) The names and post office addresses of the incorporators.
(10) Any other provisions, consistent with Indiana laws, for the
regulation of the business and conduct of the affairs of the
association and for creating, defining, limiting, or regulating the
powers of the following:
(A) The association.
(B) The directors.
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(C) The members.
(D) The shareholders of any class or classes of shareholders.
(b) The articles of incorporation must be:
(1) prepared and signed in duplicate by the incorporators; and
(2) acknowledged by at least one (1) of the incorporators before
a notary public; and
(3) (2) presented in duplicate to the secretary of state at the
secretary of state's office and accompanied by the fees prescribed
by this chapter.
SECTION 3. IC 15-12-1-14, AS ADDED BY P.L.2-2008,
SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 14. (a) Subject to subsections (b) and (c), an
association may amend the association's articles of incorporation,
merge or consolidate with one (1) or more other associations or
corporations, effect special corporate transactions as described in
IC 23-0.6 and IC 23-1, or dissolve by following the procedures
specified in IC 23-0.6 and IC 23-1.
(b) An amendment to the articles of incorporation of an association
organized under or governed by this chapter or an agreement of merger
or consolidation to which an association organized under or governed
by this chapter is a party may be adopted:
(1) by the affirmative votes of the majority of the members
entitled to vote with respect to the amendment or agreement and
voting at the meeting called for that purpose, if the voting rights
of the members are equal; or
(2) by the affirmative votes of the majority of the votes cast by the
members entitled to vote with respect to the amendment or
agreement and voting at the meeting called for that purpose, if the
voting rights of the members are not equal.
(c) A special corporate transaction or dissolution of an association
organized under or governed by this chapter may be authorized:
(1) by the affirmative votes of three-fourths (3/4) of the members
entitled to vote with respect to the transaction or dissolution and
voting at the meeting called for that purpose, if the voting rights
of the members are equal; or
(2) by the affirmative votes of three-fourths (3/4) of the votes cast
by the members entitled to vote with respect to the transaction or
dissolution and voting at the meeting called for that purpose, if
the voting rights of the members are not equal.
SECTION 4. IC 15-12-1-47, AS ADDED BY P.L.2-2008,
SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 47. IC 23-0.5, IC 23-0.6, IC 23-1, and all powers
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and rights under IC 23-0.5, IC 23-0.6, and IC 23-1 apply to
associations organized under or governed by this chapter, except where
IC 23-0.5, IC 23-0.6, or IC 23-1 conflicts with or is inconsistent with
this chapter.
SECTION 5. IC 23-0.5-5-10, AS ADDED BY P.L.118-2017,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 10. (a) If a registered foreign entity merges into
a registered or nonregistered foreign entity or converts to a foreign
entity required to register with the secretary of state to do business in
Indiana, the foreign entity shall deliver to the secretary of state for
filing a notice of merger or conversion. The notice must be signed by
the surviving or converted entity and state:
(1) the name of the registered foreign entity before the merger or
conversion;
(2) the type of entity it was before the merger or conversion;
(3) the name of the applicant entity and, if the name does not
comply with IC 23-0.5-3-1, an alternate name adopted under
section 6(a) of this chapter;
(4) the type of entity of the applicant entity and its jurisdiction of
formation; and
(5) the following information regarding the entity, if different than
the information for the foreign entity before the merger or
conversion:
(A) The street address of the principal office of the entity.
(B) The information required under IC 23-0.5-4-3(b).
(b) When a notice of merger or conversion takes effect, the
registration of the registered foreign entity to do business in Indiana is
transferred without interruption to the entity into which it has merged
or to which it has been converted.
SECTION 6. IC 23-0.5-5-11, AS AMENDED BY P.L.52-2018,
SECTION 20, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 11. (a) The secretary of state may revoke the
registration of a registered foreign entity, business trust, or
agricultural cooperative if:
(1) the entity does not pay, not later than sixty (60) days after the
due date, any fee, tax, interest, or penalty required to be paid to
the secretary of state under this article or law of Indiana other
than this article;
(2) the entity does not deliver to the secretary of state for filing,
not later than sixty (60) days after the due date, a biennial report;
(3) the entity does not have a registered agent as required by
IC 23-0.5-4-1;
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(4) the entity does not deliver to the secretary of state for filing a
statement of change under IC 23-0.5-4-6 not later than thirty (30)
days after a change occurs in the name or address of the entity's
registered agent; or
(5) the secretary of state receives a duly authenticated certificate
from the secretary of state or other official having custody of
entity filings in the state or country under whose law the entity is
registered stating that it has been dissolved or disappeared as the
result of a merger.
(b) If the secretary of state determines that one (1) or more grounds
exists under subsection (a) for revocation of a registration, the secretary
of state shall provide to the foreign entity written notice of the
determination, unless the secretary of state:
(1) receives a receipt showing failure of a previous attempt of
service of process upon the entity's registered agent at the address
of the registered office; and
(2) determines that the secretary of state's office has no record of
the entity's principal office address.
(c) The notice under subsection (b) must state:
(1) the effective date of the revocation, which must be at least
sixty (60) days after the date the secretary of state delivers the
copy; and
(2) the grounds for revocation under subsection (a).
(d) The authority of a registered foreign entity to do business in
Indiana ceases on the effective date of the notice of revocation under
subsection (b), unless before that date the entity cures each ground for
revocation stated in the notice. If the entity cures each ground, the
secretary of state shall file a record so stating.
(e) The secretary of state's revocation of a registration appoints the
secretary of state the entity's agent for service of process in any
proceeding based on a cause of action that arose during the time the
entity was authorized to transact business in Indiana. Service of process
on the secretary of state under this subsection is service on the entity.
Upon receipt of process, the secretary of state shall mail a copy of the
process to the entity at its principal office shown in its most recent
biennial report or in any subsequent communication received from the
entity stating the current mailing address of its principal office, unless
the secretary of state:
(1) receives a receipt showing failure of a previous attempt of
service of process upon the entity's registered agent at the address
of the registered office; and
(2) determines that the secretary of state's office has no record of
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the entity's principal office address.
(f) Revocation of an entity's registration does not terminate the
authority of the registered agent of the entity.
SECTION 7. IC 23-0.5-6-2, AS AMENDED BY P.L.206-2021,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 2. (a) If the secretary of state determines that one
(1) or more grounds exist under section 1 of this chapter for
administratively dissolving an entity, business trust, or agricultural
cooperative, the secretary of state shall provide to the entity written
notice of the determination unless the secretary of state:
(1) receives a receipt showing failure of a previous attempt of
service of process upon the entity's registered agent at the address
of the registered office; and
(2) determines that the secretary of state's office has no record of
the filing entity's principal office address.
(b) If a domestic filing entity, not later than sixty (60) days after
receiving the notice provided under subsection (a), does not cure or
demonstrate to the satisfaction of the secretary of state the nonexistence
of each ground determined by the secretary of state, the secretary of
state shall administratively dissolve the entity by signing a certificate
of administrative dissolution that recites the grounds for dissolution
and the effective date of dissolution. The secretary of state shall file the
certificate and provide to the entity a copy of the certificate.
(c) A domestic filing entity that is dissolved administratively
continues its existence as the same type of entity but may not carry on
any activities except:
(1) to apply for reinstatement under section 3 of this chapter; or
(2) as necessary to wind up its activities and affairs and liquidate
its assets in the manner provided in its organic law as follows:
(A) For corporations, under:
(i) IC 6-8.1-10-9;
(ii) IC 23-1-45-5;
(iii) IC 23-1-45-6; and
(iv) IC 23-1-45-7.
(B) For nonprofit corporations, under:
(i) IC 6-8.1-10-9;
(ii) IC 23-17-22-5;
(iii) IC 23-17-22-6; and
(iv) IC 23-17-22-7.
(C) For limited liability companies, under:
(i) IC 23-18-9-3;
(ii) IC 23-18-9-4;
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(iii) IC 23-18-9-5;
(iv) IC 23-18-9-6;
(v) IC 23-18-9-8;
(vi) IC 23-18-9-9; and
(vii) IC 23-18-9-10.
(D) For limited partnerships, under:
(i) IC 23-16-9-3; and
(ii) IC 23-16-9-4.
(E) For limited liability partnerships, under:
(i) IC 23-4-1-36; and
(ii) IC 23-4-1-37.
(d) The administrative dissolution of a domestic filing entity does
not terminate the authority of its registered agent.
SECTION 8. IC 23-0.5-7-1, AS ADDED BY P.L.118-2017,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 1. The secretary of state may propound to any:
(1) domestic or foreign entity, business trust, or agricultural
cooperative, that the secretary of state has reason to believe is
subject to the provisions of this title under which the domestic
entity was created or foreign entity is permitted to transact
business in Indiana; and
(2) any governing person of the entity described in subdivision
(1);
any written interrogatories as may be reasonably necessary and proper
to enable the secretary of state to ascertain whether the entity was
formed using suspected fraudulent or alternate filings or is being used
to commit fraud.
SECTION 9. IC 23-2-4-1, AS AMENDED BY P.L.278-2013,
SECTION 17, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 1. As used in this chapter, the term:
"Application fee" means the fee charged an individual, in addition
to the entrance fee or any other fee, to cover the provider's reasonable
costs in processing the individual's application to become a resident.
"Commissioner" means the securities commissioner as provided in
IC 23-19-6-1(a).
"Continuing care agreement" means the following:
(1) For continuing care retirement communities registered before
January 2, 2007, an agreement by a provider to furnish to at least
one (1) individual, for the payment of an entrance fee and
periodic charges, accommodations in a living unit of a home, and
at least two (2) of the following services for the life of the
individual or for more than one (1) month unless the agreement
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is cancelled:
(A) Meals and related services.
(B) Nursing care services.
(C) Medical services.
(D) Other health related services.
(2) For continuing care retirement communities registered after
January 1, 2007, and before July 1, 2009, an agreement by a
provider to furnish to an individual, for the payment of an
entrance fee of at least twenty-five thousand dollars ($25,000),
and periodic charges, accommodations in a living unit of a
home, and at least one (1) of the following services for the life
of the individual or for more than one (1) month unless the
agreement is canceled:
(A) accommodations in a living unit of a continuing care
retirement community;
(B) (A) meals and related services;
(C) (B) nursing care services;
(D) (C) medical services;
(E) (D) other health related services; or
(F) (E) any combination of these services.
for the life of the individual or for more than one (1) month,
unless the agreement is canceled.
(3) For continuing care retirement communities registered after
June 30, 2009, an agreement by a provider to furnish to an
individual, for the payment of an entrance fee of at least
twenty-five thousand dollars ($25,000), and periodic charges,
accommodations in a living unit of a home, and at least one (1)
of the following services for the life of the individual unless
the agreement is terminated as specified under this chapter:
(A) accommodations in a living unit of a continuing care
retirement community;
(B) (A) meals and related services;
(C) (B) nursing care services;
(D) (C) medical services;
(E) (D) other health related services; or
(F) (E) any combination of these services.
for the life of the individual, unless the agreement is terminated
as specified under this chapter.
"Continuing care retirement community" includes both of the
following:
(1) An independent living facility.
(2) A health facility licensed under IC 16-28.
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"Contracting party" means a person or persons who enter into a
continuing care agreement with a provider.
"Entrance fee" means the sum of money or other property paid or
transferred, or promised to be paid or transferred, to a provider in
consideration for one (1) or more individuals becoming a resident of a
continuing care retirement community under a continuing care
agreement.
"Living unit" means a room, apartment, cottage, or other area within
a continuing care retirement community set aside for the use of one (1)
or more identified residents.
"Long term financing" means financing for a period in excess of one
(1) year.
"Omission of a material fact" means the failure to state a material
fact required to be stated in any disclosure statement or registration in
order to make the disclosure statement or registration, in light of the
circumstances under which they were made, not misleading.
"Person" means an individual, a corporation, a partnership, an
association, a limited liability company, or other legal entity.
"Provider" means a person that agrees to provide care under a
continuing care agreement.
"Refurbishment fee" means the fee charged an individual, in
addition to the entrance fee or any other fee, to cover the provider's
reasonable costs in refurbishing a previously occupied living unit
specifically designated for occupancy by that individual.
"Resident" means an individual who is entitled to receive benefits
under a continuing care agreement.
"Solicit" means any action of a provider in seeking to have an
individual residing in Indiana pay an application fee and enter into a
continuing care agreement, including:
(1) personal, telephone, or mail communication or any other
communication directed to and received by any individual in
Indiana; and
(2) advertising in any media distributed or communicated by any
means to individuals residing in Indiana.
"Termination" refers to the cancellation of a continuing care
agreement under this chapter.
SECTION 10. IC 23-18-1-6 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 6. "Corporation" means
a domestic corporation or a foreign corporation (as defined in either
IC 23-1 IC 23-0.5 or IC 23-17).
SECTION 11. IC 23-18-6-4 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 4. (a) Unless otherwise
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provided in a written operating agreement, a limited liability company
existing under this article on or before June 30, 1999, is governed by
this section.
(b) Except as otherwise provided in a written operating agreement,
if a limited liability company has at least two (2) members, an
assignee of an interest may become a member only if the other
members unanimously consent. If a limited liability company has
only one (1) member, an assignee of the entire interest may become
a member:
(1) under the terms of an agreement between the assignor and
the assignee; or
(2) except as otherwise provided in a written operating
agreement by a specific reference to this subsection or as
otherwise provided in an agreement between the assignor and
the assignee, automatically upon the voluntary assignment by
the sole member of all the member's interest to a single
assignee that the member consented to at the time of the
assignment and that was not affected by foreclosure or other
similar legal process.
The consent of a member may be evidenced in any manner specified
in writing in an operating agreement, but in the absence of a
specification, consent must be evidenced by a written instrument, dated
and signed by the member.
(c) An assignee who becomes a member:
(1) has, to the extent assigned, the rights and powers and is
subject to the restrictions and liabilities of a member under the
articles of organization, any operating agreement, and this article;
and
(2) is liable for any obligations of the member's assignor for
unpaid contributions under IC 23-18-5-1 or for any wrongful
distributions under IC 23-18-5-7.
However, the assignee is not obligated for liabilities of which the
assignee had no knowledge at the time the assignee became a member
and that could not be ascertained from a written operating agreement.
(d) Whether or not an assignee of an interest becomes a member, the
assignor is not released from the assignor's liability to the limited
liability company for unpaid contributions under IC 23-18-5-1 or for
any wrongful distributions under IC 23-18-5-7 that are solely a result
of the assignment.
(e) Unless otherwise provided in a written operating agreement, a
member who assigns the member's entire interest in the limited liability
company ceases to be a member or to have the power to exercise any
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rights of a member when an assignee of the member's interest becomes
a member with respect to the assigned interest.
SECTION 12. IC 23-18-6-4.1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 4.1. (a) A limited
liability company formed under this article after June 30, 1999, is
governed by this section.
(b) Except as otherwise provided in a written operating agreement,
if a limited liability company has at least two (2) members, an assignee
of an interest may become a member only if the other members
unanimously consent. The consent of a member may be evidenced in
any manner specified in writing in an operating agreement, but in the
absence of a specification, consent must be evidenced by a written
instrument, dated and signed by the member. If a limited liability
company has only one (1) member, an assignee of an the entire
interest may become a member:
(1) in accordance with the terms of an agreement between the
assignor and the assignee; or
(2) except as otherwise provided in a written operating
agreement by a specific reference to this subsection or as
otherwise provided in an agreement between the assignor and
the assignee, automatically upon the voluntary assignment by
the sole member of all of the member's interest to a single
assignee that the member consented to at the time of the
assignment and that was not affected by foreclosure or other
similar legal process.
The consent of a member may be evidenced in any manner
specified in writing in an operating agreement, but in the absence
of a specification, consent must be evidenced by a written
instrument, dated and signed by the member.
(c) An assignee who becomes a member:
(1) has, to the extent assigned, the rights and powers and is
subject to the restrictions and liabilities of a member under the
articles of organization, any operating agreement, and this article;
and
(2) is liable for any obligations of the member's assignor for
unpaid contributions under IC 23-18-5-1 or for any wrongful
distributions under IC 23-18-5-7.
However, the assignee is not obligated for liabilities of which the
assignee had no knowledge at the time the assignee became a member
and that could not be ascertained from a written operating agreement.
(d) Whether or not an assignee of an interest becomes a member, the
assignor is not released from the assignor's liability to the limited
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liability company for unpaid contributions under IC 23-18-5-1 or for
any wrongful distributions under IC 23-18-5-7 that are solely a result
of the assignment.
(e) Unless otherwise provided in a written operating agreement, a
member who assigns the member's entire interest in the limited liability
company ceases to be a member or to have the power to exercise any
rights of a member.
SECTION 13. IC 23-19-6-1, AS AMENDED BY P.L.175-2019,
SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 1. (a) This article shall be administered by a
division of the office of the secretary of state. The secretary of state
shall appoint a securities commissioner who shall be responsible for
the direction and supervision of the division and the administration of
this article under the direction and control of the secretary of state. The
salary of the securities commissioner shall be paid out of the funds
appropriated for the administration of this article. The commissioner
shall serve at the will of the secretary of state.
(b) The secretary of state:
(1) shall employ a chief deputy, attorneys, a senior investigator,
a senior accountant, and other deputies, investigators,
accountants, clerks, stenographers, and other employees necessary
for the administration of this article; and
(2) shall fix their compensation with the approval of the budget
agency.
(c) It is unlawful for the commissioner or an officer, employee, or
designee of the commissioner to use for personal benefit or the benefit
of others records or other information obtained by or filed with the
commissioner that is not public under section 7(b) of this chapter. This
article does not authorize the commissioner or an officer, employee, or
designee of the commissioner to disclose the record or information,
except in accordance with section 2, 7(c), or 8 of this chapter.
(d) This article does not create or diminish a privilege or exemption
that exists at common law, by statute or rule, or otherwise.
(e) Subject to IC 4-2-6-15, the commissioner may develop and
implement investor education initiatives to inform the public about
investing in securities, with particular emphasis on the prevention and
detection of securities fraud. In developing and implementing these
initiatives, the commissioner may collaborate with public and nonprofit
organizations with an interest in investor education. The commissioner
may accept a grant or donation from a person that is not affiliated with
the securities industry or from a nonprofit organization, regardless of
whether the organization is affiliated with the securities industry, to
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develop and implement investor education initiatives. This subsection
does not authorize the commissioner to require participation or
monetary contributions of a registrant in an investor education
program.
(f) The securities division enforcement account is established.
Except as provided in subsection (o), fees and funds of whatever
character accruing from the administration of this article shall be
accounted for by the secretary of state and shall be deposited with the
treasurer of state to be deposited by the treasurer of the state in either
the state general fund or the securities division enforcement account.
Subject to IC 4-2-6-15, expenses incurred in the administration of this
article shall be paid from the state general fund upon appropriation
being made for the expenses in the manner provided by law for the
making of those appropriations. The following shall be deposited by the
treasurer of state in the securities division enforcement account:
(1) Grants and donations received under subsection (e).
(2) Costs of investigations recovered under section 4(e) of this
chapter.
(3) Fifty percent (50%) of the first four million dollars
($4,000,000):
(A) of a civil penalty recovered under section 3(b) or 4(d) of
this chapter;
(B) recovered in a settlement of an action initiated to enforce
this article; or
(C) awarded as a judgment in an action to enforce this article.
(g) The following shall be deposited by the treasurer of state in the
state general fund:
(1) Fifty percent (50%) of the first four million dollars
($4,000,000):
(A) of a civil penalty recovered under section 3(b) or 4(d) of
this chapter;
(B) recovered in a settlement of an action initiated to enforce
this article; or
(C) awarded as a judgment in an action to enforce this article.
(2) Any amount exceeding four million dollars ($4,000,000):
(A) of a civil penalty recovered under section 3(b) or 4(d) of
this chapter;
(B) recovered in a settlement of an action initiated to enforce
this article; or
(C) awarded as a judgment in an action to enforce this article.
(3) Subject to subsection (o), other fees and revenues that are not
designated for deposit in the securities division enforcement
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account or the securities restitution fund.
(h) Notwithstanding IC 23-2-2.5-34, IC 23-2-2.5-43, IC 23-2.5-2,
IC 23-19-4-12, IC 25-11-1-15, and this chapter, five percent (5%) of
funds received for deposit in the securities division enforcement
account shall instead be deposited in the securities restitution fund
established by IC 23-20-1-25. Subject to IC 4-2-6-15, the funds
deposited in the enforcement account shall be available, with the
approval of the budget agency:
(1) to augment and supplement the funds appropriated for the
administration of this article; and
(2) for grants and awards to nonprofit entities for programs and
activities that will further investor education and financial literacy
in the state.
The funds in the enforcement account do not revert to the state general
fund at the end of any state fiscal year.
(i) In connection with the administration and enforcement of this
article, the attorney general shall render all necessary assistance to the
commissioner upon the commissioner's request, and to that end, the
attorney general shall employ legal and other professional services as
are necessary to adequately and fully perform the service under the
direction of the commissioner as the demands of the securities division
shall require. Expenses incurred by the attorney general for the
purposes stated in this subsection shall be chargeable against and paid
out of funds appropriated to the attorney general for the administration
of the attorney general's office. The attorney general may authorize the
commissioner and the commissioner's designee to represent the
commissioner and the securities division in any proceeding involving
enforcement or defense of this article.
(j) Neither the secretary of state, the commissioner, nor an employee
of the securities division shall be liable in their individual capacity,
except to the state, for an act done or omitted in connection with the
performance of their respective duties under this article.
(k) The commissioner shall take, prescribe, and file the oath of
office prescribed by law. The commissioner, chief deputy
commissioner, and each attorney or investigator designated by the
commissioner are police officers of the state and shall have all the
powers and duties of police officers in making arrests for violations of
this article, or in serving any process, notice, or order connected with
the enforcement of this article by whatever officer, authority, or court
issued and shall comprise the enforcement department of the division
and are considered a criminal justice agency for purposes of IC 5-2-4
and IC 10-13-3.
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(l) The provisions of this article delegating and granting power to
the secretary of state, the securities division, and the commissioner
shall be liberally construed to the end that:
(1) the practice or commission of fraud may be prohibited and
prevented;
(2) disclosure of sufficient and reliable information in order to
afford reasonable opportunity for the exercise of independent
judgment of the persons involved may be assured; and
(3) the qualifications may be prescribed to assure availability of
reliable broker-dealers, investment advisers, and agents engaged
in and in connection with the issuance, barter, sale, purchase,
transfer, or disposition of securities in this state.
It is the intent and purpose of this article to delegate and grant to and
vest in the secretary of state, the securities division, and the
commissioner full and complete power to carry into effect and
accomplish the purpose of this article and to charge them with full and
complete responsibility for its effective administration.
(m) Copies of any statement and documents filed in the office of the
secretary of state and of any records of the secretary of state certified
by the commissioner shall be admissible in any prosecution, action,
suit, or proceeding based upon, arising out of, or under this article to
the same effect as the original of such statement, document, or record
would be if actually produced.
(n) IC 4-21.5 and any rules of practice adopted by the securities
division are applicable to administrative proceedings under this article.
(o) Notwithstanding any other law, two percent (2%) of funds
received for deposit in the state general fund as described in
subsection (g)(3) shall instead be deposited in the securities
restitution fund established by IC 23-20-1-25.
SECTION 14. IC 23-20-1-25, AS ADDED BY P.L.114-2010,
SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 25. (a) The securities restitution fund is
established.
(b) The fund consists of: amounts:
(1) amounts from funds received for deposit in the securities
division enforcement account as provided in IC 23-19-6-1(f);
IC 23-19-6-1(h); and
(2) two percent (2%) of funds received from other fees and
revenues from the administration of IC 23-19 that would
otherwise be deposited in the state general fund as provided
in IC 23-19-6-1(o); and
(2) (3) amounts appropriated from the general assembly.
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SECTION 15. IC 23-20-1-27 IS REPEALED [EFFECTIVE JULY
1, 2023]. Sec. 27. Money in the fund and income derived from money
in the fund do not revert to the state general fund at the end of a state
fiscal year.
SECTION 16. IC 23-20-1-27.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2023]: Sec. 27.5. If the balance of the fund at
the end of a particular state fiscal year exceeds two million dollars
($2,000,000), the amount that exceeds two million dollars
($2,000,000) reverts to the state general fund.
SECTION 17. IC 23-20-1-28, AS ADDED BY P.L.114-2010,
SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 28. (a) If the fund would be reduced below two
hundred fifty thousand dollars ($250,000) by payment in full of all
awards that become final in a month, the division shall suspend
payment of the claims that become final during the month and the
following two (2) months.
(b) At the end of the suspension period, the division shall pay the
suspended claims. If the fund would be exhausted by payment in full
of the suspended claims, the amount paid to each claimant shall be
prorated.
(c) To ensure the financial viability of the fund, the
commissioner may:
(1) divide into installments;
(2) delay; or
(3) divide into installments and delay;
any payments owed to claimants under this chapter.
HEA 1581 Speaker of the House of Representatives
President of the Senate
President Pro Tempore
Governor of the State of Indiana
Date: Time:
HEA 1581