A.  Except as provided in Subsection C of this Section, a housing authority may indemnify a representative of a local housing authority who is made a party to a proceeding, because the representative is or was such, against liability incurred in the proceeding unless either:

(1)  The conduct of the representative was outside the scope of his official duties.

(2)  The representative’s conduct constituted malfeasance in office.

(3)  The representative’s conduct constituted a wilful or wanton neglect of duty.

B.  The termination of a proceeding by judgment, order, settlement, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the representative did not meet the standard of conduct described in this Section.

C.  A housing authority may not indemnify a representative under this Section in connection with either:

(1)  A proceeding by or in the right of a housing authority in which the representative was adjudged liable to the housing authority.

(2)  Any other proceeding charging improper personal benefit to the representative in which the representative was adjudged liable on the basis that personal benefit was improperly received by the representative.

D.  Indemnification permitted under this Section in connection with a proceeding by or in the right of a housing authority is limited to reasonable expenses incurred in connection with the proceeding.

Acts 1997, No. 1188, §1.