Section 5-1.5-8-5 - Department or agency of state as custodian of money payable to qualified entity; duty on default on payment of principal or interest by qualified entity(a) Notwithstanding any other provision of law, to the extent that any department or agency of the state, including the treasurer of state, is the custodian of money payable to the qualified entity (other than for goods or services provided by the qualified entity), at any time after written notice to the department or agency head from the bank that the qualified entity is in default on the payment of principal or interest on the securities of the qualified entity then held or owned by or arising from an agreement with the bank, the department or agency shall withhold the payment of that money from that qualified entity and pay over the money to the bank for the purpose of paying principal of and interest on bonds of the bank. However, the withholding of payment from the qualified entity and payment to the bank under this section must not adversely affect the validity of the security in default.(b) This subsection applies to securities of a qualified entity acquired by the bank, or arising from an agreement entered into with the bank, on or after March 1, 2016. Upon receiving notice from the bank that a qualified entity has failed to pay when due the principal or interest on the securities of the qualified entity then held or owned by or arising from an agreement with the bank, the fiscal officer (as defined in IC 36-1-2-7) of the county, for any county in which the qualified entity is wholly or partially located, shall do the following: (1) Reduce the amount of any revenues or other money or property that:(A) is held, possessed, maintained, controlled, or otherwise in the custody of the county or a department, an agency, or an instrumentality of the county; and(B) would otherwise be available for distribution to the qualified entity under any other law; by an amount equal to the amount of the qualified entity's unpaid securities.
(2) Pay the amount by which the revenues or other money or property is reduced under subdivision (1) to the bank to pay the principal of and interest on bonds or other obligations of the bank.(3) Notify the qualified entity that the revenues or other money or property, which would otherwise be available for distribution to the qualified entity, has been reduced by an amount necessary to satisfy all or part of the qualified entity's unpaid securities to the bank.(c) This subsection applies to securities of a qualified entity acquired by the bank, or arising from an agreement with the bank, that is covered by subsection (b). A reduction under subsection (b) must be made as follows: (1) First, from local income tax distributions under IC 6-3.6-9 that would otherwise be distributed to the qualified entity under the schedules in IC 6-3.6-9-12 and IC 6-3.6-9-16.(2) Second, from any other revenues or other money or property that: (A) is held, possessed, maintained, or controlled by, or otherwise in the custody of, the county or a department, an agency, or an instrumentality of the county; and(B) would otherwise be available for distribution to the qualified entity under any other law.Amended by P.L. 47-2016, SEC. 1, eff. 3/21/2016.As added by P.L. 25-1984, SEC.1. Amended by P.L. 43-1985, SEC.26; P.L. 46-1987, SEC.16.