(1) The county sells a county hospital before January 1, 2017.

     (b) As used in this section, “board” means the board of trustees of a foundation established under subsection (f).

     (c) As used in this section, “foundation” means a charitable nonprofit foundation established under subsection (d).

     (d) A county council and a county executive may, by adopting substantially similar ordinances, establish a charitable nonprofit foundation to hold some or all of the proceeds of the sale of a county hospital in trust for the benefit of the county.

     (e) Nothing in subsection (d) shall be construed as superseding, replacing, or modifying any previously adopted ordinance or agreement that effectuates:

(1) monetary disbursements from the previously executed asset purchase agreement; and

(2) distributions from the previously executed asset purchase agreement;

to an Indiana nonprofit corporation.

     (f) If a foundation is established under this section, the board of trustees of the foundation consists of the following five (5) members:

(1) One (1) member of the county council, appointed by the president of the county council.

(2) One (1) member of the county executive, appointed by the president of the county executive.

(3) One (1) individual who has at least five (5) years of experience as a certified public accountant, a financial adviser, a banker, or an investment manager, appointed by the president of the county council.

(4) One (1) individual who has at least five (5) years of experience as a certified public accountant, a financial adviser, a banker, or an investment manager, appointed by the president of the county executive.

(5) The county treasurer.

A member who serves on the board under this subsection is not entitled to compensation for service as a board member. Subject to the approval of the policy by the county council and the county executive, the board may establish a policy to reimburse a member of the board for the member’s travel expenses and other expenses actually incurred in connection with the member’s duties.

     (g) The county treasurer shall serve as the chairperson of the board.

     (h) The board of a foundation established under this section shall contract with a financial institution eligible to receive public funds of a political subdivision under IC 5-13-8-1 to assist the board in its investment program.

     (i) The county council and the county executive shall do the following:

(1) Formulate an investment policy that ensures that money held by the foundation is invested in accordance with IC 30-2-12.

(2) Establish a policy concerning distributions of income and principal from the foundation.

A policy concerning distributions of income and principal that is established under subdivision (2) must specify that, except as provided in subsection (j)(6), the board may not expend or transfer money from the principal amount of the donation to the foundation.

     (j) The following apply if a foundation is established under this section:

(1) The county council and the county executive shall determine:

(A) the amount of the proceeds from the sale of the county hospital that shall be transferred by the county fiscal officer to the foundation; and

(B) the amount of excess money received by the county from the annual rate of spending distributed by the foundation that shall be transferred by the county fiscal officer to the foundation, if any.

(2) The principal amount of the donation to the foundation consists of the following:

(A) The amounts transferred to the foundation under subdivision (1).

(B) Any donations, gifts, or other money received from any private source.

(C) Any investment income that is:

(i) earned on the principal of the donation; and

(ii) added to the principal of the donation as provided in subdivision (3).

(3) To the extent that investment income earned on the principal amount of the donation during a calendar year exceeds five percent (5%) of the amount of the principal at the beginning of the calendar year, that excess investment income shall, for purposes of this section, be added to and be considered a part of the principal amount of the donation.

(4) The county council and county executive shall establish a policy to set the annual rate of spending from the foundation. The rate of spending established by the county council and county executive may not exceed five percent (5%) of the principal amount of the donation calculated on January 1 of each year. The county council and county executive may change the annual rate of spending by a majority vote of the members of the county council and a majority vote of the members of the county executive. Any principal that is disbursed from the foundation to the county is not subject to the procedures to access the principal amount of the donation described in subdivision (6).

(5) The county council and county executive may not access the principal amount of the donation in the first five (5) years from the date the foundation is established under this section. Beginning after the fifth year from the date the foundation is established under this section, the county council and county executive may access the principal amount of the donation in accordance with subdivision (6).

(6) This subdivision does not apply to an expenditure or transfer of money that is part of the principal amount of the donation that is used to meet the annual rate of spending and does not exceed the annual rate of spending established under subdivision (4). The county council and county executive may approve an expenditure or transfer of any money that is part of the principal amount of the donation in accordance with the following:

(A) The county council and county executive may access the lesser of ten percent (10%) of the three (3) year average balance or two million dollars ($2,000,000) from the principal amount of the donation as follows:

(i) A vote of five (5) of the seven (7) members of the county council and a majority vote of the county executive at a joint meeting of the county council and the county executive must vote in favor of accessing the principal amount of the donation.

(ii) A vote under item (i) to access the principal amount of the donation may occur not more than one (1) time per year.

(iii) The three (3) year average balance is based on the opening balance of the principal amount of the donation on the first day of the month of each of the thirty-six (36) months immediately preceding the joint meeting of the county council and the county executive described in item (i).

(B) If the county council and county executive wish to access an amount from the principal amount of the donation that is more than the amount available under clause (A) but not more than fifty percent (50%) of the principal amount of the donation, the board shall proceed as follows:

(i) Five (5) of the seven (7) members of the county council and a majority vote of the county executive at a joint meeting of the county council and the county executive must vote in favor of accessing the principal amount of the donation. The votes of the county council and the county executive at the joint meeting must occur on two (2) occasions as provided in item (ii).

(ii) The votes described in item (i) must occur on two (2) occasions that are at least one (1) year apart but not more than two (2) years apart.

(iii) The votes described in item (i) must be based on identical language in an ordinance that sets forth the approved use of the funds accessed from the principal amount of the donation.

If the language in an ordinance under this clause is different from the language used in the first vote, the process to vote on accessing the principal amount of the donation must start over. The process to access the principal amount of the donation described in this clause may be used only once in any five (5) year period after the expiration of the five (5) year period in which the principal amount may not be accessed under subdivision (5).

(C) To compute the five (5) year period described in clause (B), the period begins from the date on which the second vote to access the principal amount of the donation occurs.

(7) The foundation must be audited annually by an independent third party auditor.

(8) The board must meet at least quarterly to receive a quarterly compliance and performance update from the investment adviser.

     (k) A unit located in a county to which this section applies may enter into an interlocal agreement under IC 36-1-7 with the county council, the county executive, and the board to invest funds obtained by the unit from the sale of a capital asset into the foundation established under this section. An interlocal agreement entered into under this subsection must contain the following:

(1) Funds transferred to the foundation from the sale of a capital asset under this subsection must be held in a separate account within the foundation and are not subject to the requirements of accessing principal and income established in this section.

(2) A policy concerning distributions of income and principal from the unit’s account within the foundation.

The department of local government finance may not reduce the actual or maximum permissible property tax levy under IC 6-1.1-18.5 or any other law of a unit that enters into an interlocal agreement under this subsection on account of money transferred into or expended from a foundation established under this section.

     (l) Notwithstanding any provision to the contrary, in order to fulfill the purposes for which it was created and exists, the board shall establish one (1) or more separate accounts within the foundation in which funds under subsection (j)(2) shall be held, all upon request and direction of the county council and county executive. All of the provisions and requirements for accessing principal and income under this section shall also apply to any such separate accounts established within the foundation under this subsection.

     (m) Subject to subsection (j)(5), money from the principal amount of the donation may be used for any legal or corporate purpose of the county, including the pledge of money to pay bonds, leases, or other obligations under IC 5-1-14-4. Money from the principal amount of the donation that is expended or transferred under subsection (j)(6) may be used to pay bonds issued by the county. The county council and the county executive may vote once under subsection (j)(6) to expend or transfer money from the principal amount of the donation to pay interest on bonds issued by the county.

     (n) The department of local government finance may not reduce the county’s actual or maximum permissible property tax levy under IC 6-1.1-18.5 or any other law on account of money deposited into or expended from a foundation established under this section.

As added by P.L.183-2018, SEC.1. Amended by P.L.40-2021, SEC.2.