Introduced Version
SENATE BILL No. 200
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 4-13-2-7; IC 5-10-9.5.
Synopsis: Nonprofit loan center loans for state employees. Provides
that not later than: (1) September 1, 2024, in the case of a state agency
other than a state educational institution or a school corporation; (2)
September 1, 2025, in the case of a state agency that is a state
educational institution; or (3) September 1, 2026, in the case of a state
agency that is a school corporation; a state agency shall partner with
each nonprofit loan center (NLC) operating in Indiana to become a
participating employer in the NLC's nonprofit loan center program
(NLC program) by offering voluntary payroll deductions for eligible
full-time employees to make payments toward the balance of a
nonprofit loan center loan (NLC loan) made by a nonprofit loan center
lender (NLC lender). Provides that after becoming a participating
employer in an NLC program, a state agency shall allow an eligible
employee to: (1) voluntarily request and establish payroll deductions
for an NLC loan at any time; and (2) revoke the employee's
authorization for payroll deductions for an NLC loan at any time;
including any time that falls outside a designated open enrollment
period for employee benefits. Defines an "NLC loan" as a loan that
meets certain requirements with respect to the principal amount, loan
term, finance charge, authorized fees, method of repayment, and other
loan terms. Authorizes the state comptroller to authorize the electronic
transfer of funds from the state treasury to a designated NLC lender in
payment of an NLC loan on behalf of an eligible employee who has
voluntarily given the state comptroller written authorization, through
the eligible employee's employing state agency, to make the transfer.
Specifies that: (1) a loan made under the bill's provisions; or (2) a
(Continued next page)
Effective: July 1, 2024.
Deery
January 9, 2024, read first time and referred to Committee on Insurance and Financial
Institutions.
2024 IN 200—LS 6692/DI 101 Digest Continued
person that makes a loan under the bill's provisions; is subject to the
requirements of the Uniform Consumer Credit Code chapter governing
consumer loans.
2024 IN 200—LS 6692/DI 1012024 IN 200—LS 6692/DI 101 Introduced
Second Regular Session of the 123rd General Assembly (2024)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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Additions: Whenever a new statutory provision is being enacted (or a new constitutional
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between statutes enacted by the 2023 Regular Session of the General Assembly.
SENATE BILL No. 200
A BILL FOR AN ACT to amend the Indiana Code concerning state
and local administration.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 4-13-2-7, AS AMENDED BY THE TECHNICAL
2 CORRECTIONS BILL OF THE 2024 GENERAL ASSEMBLY, IS
3 AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2024]:
4 Sec. 7. (a) Subject to this chapter and other laws not inconsistent with
5 this chapter, the auditor of state comptroller shall, respecting all
6 agencies of the state, do the following:
7 (1) Maintain the centralized accounting records for the state, keep
8 the general books of accounts on a double entry basis, and
9 maintain accounts as will reflect in detail or in summary, all
10 assets, liabilities, reserves, surpluses, revenues and receipts,
11 appropriations, allotments, expenditures, and encumbrances
12 except as otherwise provided in this chapter. The accounting
13 records and procedures must provide complete fiscal control over
14 all agencies of the state and over all activities carried on by them
15 and be upon forms, records, and systems approved by the state
2024 IN 200—LS 6692/DI 101 2
1 board of accounts.
2 (2) Examine every receipt, account, bill, claim, refund, and
3 demand against the state arising from activities carried on by
4 agencies of the state, approve each legal, correct, and proper
5 claim, designate the account to be charged therefor, and issue the
6 auditor's state comptroller's warrant in payment thereof. The
7 auditor of state comptroller may authorize the disbursement
8 through electronic funds transfer in conformity with IC 4-8.1-2-7.
9 All warrants and electronic funds transfers shall be payable to the
10 vendor or claimant and in no instance shall the auditor state
11 comptroller issue any warrant or make any electronic funds
12 transfer payable to an officer or agency in payment of several
13 claims where the officer is to distribute or pay to the several
14 claimants the amount due, except in the case of special
15 disbursement officers as provided for in this chapter. However,
16 the auditor of state comptroller shall not be required to audit
17 claims for any refunds made pursuant to IC 6-6-1.1 and
18 IC 6-6-2.5.
19 (3) Examine each and every payroll or salary voucher submitted
20 for payment by each state officer or state agency and shall issue
21 the auditor's state comptroller's warrant in payment, payable to
22 the officer or employee or claimant, except as provided in
23 subdivision (5). In no instance shall the auditor state comptroller
24 issue the auditor's state comptroller's warrant payable to any
25 officer or agency in payment of a payroll or schedule to be
26 distributed or paid to employees by the officer or agency.
27 (4) Keep an earnings record for each employee that shows gross
28 compensation, net compensation, items withheld for federal tax,
29 public employees' retirement, teachers' retirement, or other
30 retirement, and any other deductions authorized to be deducted
31 from earnings, and shall, as required by law, make settlement with
32 the proper officers, agents, or agencies for the deductions.
33 (5) Authorize the electronic transfer of funds from the state
34 treasury to a designated deposit account in payment of a payroll
35 or salary voucher on behalf of a state employee who has given the
36 auditor state comptroller written authorization to make the
37 transfer under IC 4-15-5.9-2.
38 (6) Authorize the electronic transfer of funds from the state
39 treasury to a designated nonprofit loan center lender (as
40 defined in IC 5-10-9.5-5) in payment of a nonprofit loan
41 center loan (as defined in IC 5-10-9.5-6) on behalf of an
42 eligible employee (as defined in IC 5-10-9.5-3) who has
2024 IN 200—LS 6692/DI 101 3
1 voluntarily given the state comptroller written authorization,
2 through the eligible employee's state agency, to make the
3 transfer under IC 5-10-9.5-10(d).
4 (6) (7) Accept all documents and reports showing evidences of
5 the collection of state revenues by state agencies, evidences of the
6 deposit of the revenues, and evidences of the receipt thereof by
7 the treasurer of state and designate the fund or account to be
8 credited.
9 (7) (8) Have all other powers and duties respecting all agencies of
10 the state as may be imposed upon the auditor state comptroller
11 by law or transferred to the auditor state comptroller by this
12 chapter.
13 (b) The auditor of state comptroller may issue a warrant or make
14 an electronic funds transfer in conformity with IC 4-8.1-2-7 to a person
15 who:
16 (1) has a contract with the state; and
17 (2) is entitled to payment under that contract;
18 without the certification required by IC 5-11-10-1.
19 (c) The auditor state comptroller may not issue a warrant or make
20 an electronic funds transfer under subsection (b) except in accordance
21 with procedures adopted by the state board of accounts.
22 (d) The auditor state comptroller is not personally liable for a
23 warrant issued or an electronic funds transfer made under subsection
24 (b) if:
25 (1) the auditor state comptroller complies with the procedures
26 described in subsection (c); and
27 (2) funds are appropriated and available to pay the warrant or
28 electronic funds transfer.
29 (e) This subsection applies to a payment of less than five thousand
30 dollars ($5,000). Notwithstanding any other law, the auditor of state
31 comptroller may elect to:
32 (1) not preaudit a payment; and
33 (2) process the payment with the state agency authorizing the
34 payment.
35 The state agency is accountable to the state board of accounts under the
36 board's post payment auditing procedures.
37 SECTION 2. IC 5-10-9.5 IS ADDED TO THE INDIANA CODE
38 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
39 JULY 1, 2024]:
40 Chapter 9.5. Payroll Payments to Nonprofit Loan Center
41 Lenders
42 Sec. 1. As used in this chapter, "consumer reporting agency that
2024 IN 200—LS 6692/DI 101 4
1 compiles and maintains files on consumers on a nationwide basis"
2 has the meaning set forth in 15 U.S.C. 1681a(p).
3 Sec. 2. As used in this chapter, "depository institution" has the
4 meaning set forth in IC 24-4.5-1-301.5(12).
5 Sec. 3. As used in this chapter, "eligible employee" means an
6 individual who:
7 (1) is employed full time by a state agency; and
8 (2) resides in a community in Indiana that is served by a
9 nonprofit loan center.
10 Sec. 4. As used in this chapter, "nonprofit loan center", or
11 "NLC", means a nonprofit organization that operates a nonprofit
12 loan center program that is offered to residents in one (1) or more
13 communities in Indiana.
14 Sec. 5. As used in this chapter, "nonprofit loan center lender",
15 or "NLC lender", means a lender that is:
16 (1) licensed by the department of financial institutions under
17 IC 24-4.5-3; and
18 (2) regularly engaged in making nonprofit loan center loans
19 through a nonprofit loan center program.
20 Sec. 6. (a) As used in this chapter, "nonprofit loan center loan",
21 or "NLC loan", means a loan that is offered through a nonprofit
22 loan center program and that meets the following requirements:
23 (1) The loan is made primarily for personal, family, or
24 household purposes.
25 (2) The principal (as defined in IC 24-4.5-3-107(3)) of the loan
26 does not exceed one thousand dollars ($1,000).
27 (3) The term of the loan is at least twelve (12) months.
28 (4) The loan finance charge, calculated according to the
29 actuarial method, does not exceed eighteen percent (18%) per
30 year on the unpaid balances of the principal (as defined in
31 IC 24-4.5-3-107(3)).
32 (5) Any prepaid finance charge (however denominated by the
33 NLC lender) that is imposed under IC 24-4.5-3-201(3)(d):
34 (A) does not exceed thirty-five dollars ($35); and
35 (B) notwithstanding IC 24-4.5-3-201(10), may, at the
36 option of the NLC lender, be refunded to the borrower
37 upon the borrower's completion of one (1) or more
38 consumer financial education courses.
39 (6) The loan is not subject to any additional permitted charges
40 under IC 24-4.5-3-202 other than the charge permitted under
41 IC 24-4.5-3-202(1)(f) for each returned payment by a bank or
42 other depository institution of a dishonored check, electronic
2024 IN 200—LS 6692/DI 101 5
1 funds transfer, negotiable order of withdrawal, or share draft
2 issued by the borrower, as applicable.
3 (7) The loan is not subject to any other fees or charges not
4 described in subdivisions (4) through (6) other than the
5 following, at the option of the NLC lender:
6 (A) A delinquency charge permitted under
7 IC 24-4.5-3-203.5 on any installment or minimum payment
8 due that is not paid in full not later than ten (10) days after
9 its scheduled due date.
10 (B) An application fee or administrative fee (however
11 denominated by the NLC lender) that:
12 (i) does not exceed thirty-five dollars ($35);
13 (ii) is not a condition for, or an incident to, the extension
14 of credit; and
15 (iii) is imposed by the NLC lender on all applicants for a
16 loan, regardless of whether a loan is made.
17 (8) The NLC lender does not take a security interest in any
18 real or personal property of the borrower in connection with
19 the loan.
20 (9) The borrower is not subject to a credit check, or any other
21 investigation into the borrower's creditworthiness, in
22 connection with the loan application, other than verification
23 that the borrower:
24 (A) is employed full time by an employer that participates
25 in the nonprofit loan center program;
26 (B) has an open checking account in a depository
27 institution; and
28 (C) meets any applicable monthly gross income
29 requirements that the NLC lender has established with
30 respect to different loan amounts or ranges of loan
31 amounts.
32 (10) The loan application may be completed online through
33 the NLC lender's website.
34 (11) The proceeds of the loan are deposited directly into the
35 borrower's checking account with a depository institution.
36 (12) Repayment of the loan may be made through payroll
37 deductions that:
38 (A) are made by the borrower's employer on the
39 borrower's behalf; and
40 (B) are:
41 (i) voluntarily authorized by the borrower; and
42 (ii) revokable by the borrower at any time;
2024 IN 200—LS 6692/DI 101 6
1 in compliance with IC 24-4.5-3-403.
2 (13) Approval of the loan is not conditioned on the borrower's
3 authorization of payroll deductions for repayment of the loan.
4 (14) The loan is not subject to a prepayment penalty or fee.
5 (15) The borrower's payments on the loan are reported to at
6 least one (1) consumer reporting agency that compiles and
7 maintains files on consumers on a nationwide basis.
8 (b) The term does not include a small loan (as defined in
9 IC 24-4.5-7-104) that is subject to IC 24-4.5-7.
10 Sec. 7. As used in this chapter, "nonprofit loan center
11 program", or "NLC program", means a loan program that is:
12 (1) operated by a nonprofit loan center and offered to
13 residents in one (1) or more communities in Indiana; and
14 (2) made available:
15 (A) by one (1) or more employers that partner with a
16 nonprofit loan center lender that makes loans through the
17 program; and
18 (B) to employees as an employee benefit;
19 at no cost to the employer.
20 Sec. 8. (a) As used in this chapter, "state agency" means any
21 authority, board, branch, commission, committee, department,
22 division, or other instrumentality of the executive (including the
23 administrative), judicial, or legislative branch of state government.
24 The term includes the following:
25 (1) A state elected official's office.
26 (2) A state educational institution (as defined in
27 IC 21-7-13-32).
28 (3) A body corporate and politic of the state created by state
29 statute.
30 (b) The term does not include a political subdivision (as defined
31 in IC 36-1-2-13), except for a school corporation (as defined in
32 IC 36-1-2-17).
33 Sec. 9. As used in this chapter, "statewide coordinator" means
34 a nonprofit organization that is responsible for:
35 (1) recruiting local lenders;
36 (2) engaging employers;
37 (3) raising additional capital for lending through local NLC
38 lenders; and
39 (4) providing other support for local NLC lenders;
40 in connection with NLC programs in Indiana.
41 Sec. 10. (a) Not later than:
42 (1) September 1, 2024, in the case of a state agency that is not:
2024 IN 200—LS 6692/DI 101 7
1 (A) a state educational institution (as defined in
2 IC 21-7-13-32); or
3 (B) a school corporation (as defined in IC 36-1-2-17);
4 (2) September 1, 2025, in the case of a state agency that is a
5 state educational institution (as defined in IC 21-7-13-32); or
6 (3) September 1, 2026, in the case of a state agency that is a
7 school corporation (as defined in IC 36-1-2-17);
8 a state agency shall partner with each NLC operating in Indiana to
9 become a participating employer in the NLC's nonprofit loan
10 center program by offering voluntary payroll deductions for
11 eligible employees who enter into an NLC loan offered by an NLC
12 lender.
13 (b) The statewide coordinator shall provide any necessary
14 assistance to enable state agencies to become participating
15 employers in each NLC program operating in Indiana, as required
16 by subsection (a). In providing assistance under this subsection, the
17 statewide coordinator may work with any of the following, as
18 appropriate:
19 (1) An individual state agency, including:
20 (A) the board of trustees for an individual state
21 educational institution (as defined in IC 21-7-13-32); or
22 (B) the governing body of a school corporation (as defined
23 in IC 36-1-2-17).
24 (2) The state personnel department.
25 (3) The legislative council.
26 (4) The office of judicial administration.
27 (5) Individual NLC lenders making loans through the NLC
28 program.
29 (c) After becoming a participating employer as required under
30 subsection (a), a state agency shall offer as an employee benefit the
31 opportunity for the state agency's eligible employees to make
32 payments toward the balance of an NLC loan through voluntary
33 recurring payroll deductions under IC 22-2-6-2(b)(10). A state
34 agency shall:
35 (1) allow an eligible employee to:
36 (A) voluntarily request and establish payroll deductions
37 under this subsection at any time; and
38 (B) revoke the employee's authorization for payroll
39 deductions under this subsection at any time;
40 including any time that falls outside a designated open
41 enrollment period for employee benefits, in the manner set
42 forth in subsection (d); and
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1 (2) agree, in a signed writing, to an employee's request for
2 payroll deductions under this subsection, as required by
3 IC 22-2-6-2(a)(1)(D).
4 The statewide coordinator shall provide any necessary assistance
5 to enable state agencies to offer and administer payroll deductions
6 under this subsection, including by communicating or promoting
7 the availability of the payroll deductions as an employee benefit for
8 eligible employees. In providing this assistance, the statewide
9 coordinator may work with any of the entities set forth in
10 subsection (b)(1) through (b)(5).
11 (d) Upon receiving approval for an NLC loan, an eligible
12 employee may make a written request, in accordance with
13 IC 22-2-6-2(a), to the state agency employing the eligible employee,
14 that a specified portion of any compensation due from the state
15 agency to the eligible employee be credited to the eligible
16 employee's account with the applicable NLC lender to be applied
17 as payment toward the NLC loan balance. Upon receipt of an
18 eligible employee's request to a state agency under this subsection,
19 the state comptroller, or another appropriate official or payroll
20 administrator, shall:
21 (1) draw a warrant in favor of the NLC lender set forth in the
22 eligible employee's request;
23 (2) in the event more than one (1) eligible employee of the
24 state agency designates the same NLC lender, draw a single
25 warrant in favor of the NLC lender for the total amount due
26 on behalf of the eligible employees and transmit the warrant
27 to the NLC lender identifying each eligible employee and the
28 amount to be credited to each eligible employee's account; or
29 (3) make a direct deposit to the NLC lender by electronic
30 funds transfer;
31 in the manner set forth in IC 4-15-5.9-2(a). An eligible employee's
32 written or electronic request under this subsection shall authorize
33 in advance the direct credit by warrant or electronic funds transfer
34 of the specified portion of the eligible employee's earnings each
35 time a payroll warrant or electronic funds transfer is issued on the
36 eligible employee's behalf. The eligible employee's written or
37 electronic authorization must designate an NLC lender and an
38 account number to which the payment is to be credited. The
39 eligible employee's authorization remains in effect until the eligible
40 employee revokes it in writing or by electronic means.
41 Sec. 11. Any:
42 (1) loan made under this chapter; or
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1 (2) person (as defined in IC 24-4.5-1-301.5) that makes a loan
2 under this chapter;
3 is subject to the requirements of IC 24-4.5-3 and any related rules,
4 orders, or guidance documents adopted or issued by the
5 department of financial institutions.
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