CHAPTER 10. BONDS
IC 13-26-10
Chapter 10. Bonds
IC 13-26-10-1
Issuance of revenue bonds
Sec. 1. A district may obtain money for the payment of the costsof the works or an improvement, enlargement, or extension of theworks by the issuance of revenue bonds of the district. The principaland interest of the revenue bonds must be paid solely from the netrevenues of the works.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-2
Loans from federal government
Sec. 2. A district obtaining a loan from the federal government oran agency of the federal government may issue obligations under thisarticle to the federal government or agency to evidence theindebtedness without advertising for or receiving bids. Theobligations:
(1) are payable solely from the net revenues of the works; and
(2) may be made of equal priority or subordinate to otherrevenue bonds issued or to be issued under this article orIC 13-3-2 (before its repeal).
As added by P.L.1-1996, SEC.16.
IC 13-26-10-3
Revenue bonds
Sec. 3. Revenue bonds may:
(1) bear interest, at a rate or rates not exceeding the maximumdetermined by the board, that is payable or accretes asdetermined by the board;
(2) mature at a time or times to be determined by ordinance; and
(3) be made redeemable before maturity at the option of thedistrict, to be exercised by the board, at not more than the parvalue and a premium not exceeding five percent (5%) underterms and conditions that are fixed by the ordinance authorizingthe issuance of the bonds.
As added by P.L.1-1996, SEC.16. Amended by P.L.53-2004, SEC.2.
IC 13-26-10-4
Revenue bonds; principal and interest
Sec. 4. The principal and interest of revenue bonds may be madepayable in any lawful medium. The ordinance must do the following:
(1) Determine the form of the bonds, including the interestcoupons, if any, to be attached.
(2) Fix the denomination or denominations of the bonds and theplace or places of payment of the principal and interest, whichmay be any bank or trust company within or outside Indiana.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-5
Revenue bonds; terms
Sec. 5. (a) The revenue bonds must contain a statement on theface of the bonds that the district is not obligated to pay the bonds orthe interest on the bonds except from the special fund provided fromthe net revenues of the works.
(b) All bonds are negotiable instruments.
(c) The bonds and interest are exempt from all state, county, andmunicipal taxation.
(d) The bonds may be registered in the name of the owner:
(1) as to principal alone; or
(2) as to both principal and interest.
Fully registered bonds may be made convertible to coupon bonds atthe option of the registered owner.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-6
Execution and attestation of bonds
Sec. 6. The:
(1) president of the board shall execute; and
(2) secretary of the board shall attest;
the bonds and coupons. The coupons must bear facsimile signature.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-7
Revenue bonds; sale procedure
Sec. 7. (a) Subject to subsection (b), the treasurer of the districtshall sell the revenue bonds in a manner and at a price that isdetermined to be in the best interests of the district.
(b) If the bonds are sold at public sale, the bonds shall be sold inaccordance with IC 5-1-11 as IC 5-1-11 applies to counties.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-8
Revenue bonds; disposition of proceeds
Sec. 8. (a) A surplus of revenue bond proceeds over the cost of theworks shall be paid into the sinking fund provided by this article.
(b) If the proceeds of the bonds, by error of calculation orotherwise, are less than the cost of the works, additional bonds mayin the same manner be issued to provide the amount of the deficit.Unless otherwise provided in:
(1) the ordinance authorizing the issuance of the bonds firstissued; or
(2) the trust indenture authorized by this article or IC 13-3-2(before its repeal);
the additional bonds are considered to be of the same issue and areentitled to payment from the same fund, without preference orpriority of the bonds first issued.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-9
Temporary revenue bonds
Sec. 9. Before the preparation of the definite revenue bonds,temporary revenue bonds under the same restrictions may be issuedwith or without coupons, exchangeable for definite revenue bondsupon the issuance of the latter.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-10
Loans from federal or state agency
Sec. 10. The fund to finance the construction of any of theself-liquidating works authorized by this article may be obtainedfrom a federal or state agency.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-11
Action to contest validity of bonds
Sec. 11. An action to contest the validity of bonds issued underthis article or IC 13-3-2 (before its repeal) must be brought not laterthan ten (10) days after the advertised sale date of the bonds.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-12
Issuance of additional bonds
Sec. 12. Subject to an ordinance or trust indenture pertaining tooutstanding bonds, additional bonds payable from the revenues of theworks may be authorized and issued in accordance with this articlefor the purpose of improving, enlarging, or extending works acquiredor constructed under this article or IC 13-3-2 (before its repeal).
As added by P.L.1-1996, SEC.16.
IC 13-26-10-13
Trust indenture to secure bonds
Sec. 13. The board may secure the revenue bonds by a trustindenture by and between the district and a corporate trustee, whichmay be any trust company or bank having the powers of a trustcompany within or outside Indiana. However, a trust indenture maynot convey or mortgage all or any part of the works.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-14
Contents of ordinance authorizing revenue bonds
Sec. 14. The ordinance authorizing the revenue bonds and fixingthe details of the revenue bonds may provide that the trust indenturecontain reasonable and lawful provisions for protecting andenforcing the rights and remedies of the bondholders, includingcovenants setting forth the duties of the district and the board inrelation to the following:
(1) The construction or acquisition of the works.
(2) The improvement, operation, repair, and maintenance of the
works.
(3) The issuance of bonds, including the custody, safeguarding,and application of all money.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-15
Ordinance authorizing revenue bonds
Sec. 15. The ordinance may also provide that the works shall becontracted for, constructed, and paid for under the supervision andapproval of consulting engineers employed or designated by theboard and satisfactory to the original bond purchasers, successors,assigns, or nominees. The original bond purchasers, successors,assigns, or nominees may be given the right to require that thesecurity given by:
(1) contractors; and
(2) any depository of the proceeds of bonds or revenues of theworks or other money pertaining to the works;
be satisfactory to the purchasers, successors, assigns, or nominees.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-16
Trust indenture; rights and remedies of bondholder and trustee
Sec. 16. The trust indenture may set forth the rights and remediesof the bondholders or trustee, restricting the individual right of actionof bondholders as is customary in trust indentures securing bondsand debentures of corporations.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-17
Payment of bond sale proceeds and revenue of works
Sec. 17. Unless this article otherwise provides, the board mayprovide by ordinance or in the trust indenture for the payment of:
(1) the proceeds of the sale of the bonds; and
(2) the revenues of the works;
to the officer, board, or depository that the board determines for thecustody of the money and for the method of disbursement, withsafeguards and restrictions that the board determines.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-18
Sinking fund for payment of bonds
Sec. 18. (a) At or before the time of issuance of the revenuebonds, the board shall by ordinance create a sinking fund for thepayment of the following:
(1) The bonds.
(2) The interest on the bonds.
(3) The charges of banks or trust companies for makingpayment of the bonds or interest.
(b) The board shall set aside and pledge the net revenues of theworks remaining after the payment of the reasonable expense of
operation, repair, and maintenance of the works for payment of the:
(1) principal of and interest on all bonds payable from therevenues of the works, to the extent necessary for that purpose;and
(2) necessary fiscal agency charges for paying the principal andinterest of the bonds.
(c) The ordinance may also provide for the accumulation ofreasonable reserves in the sinking fund:
(1) as a margin for safety and a protection against default; and
(2) for the payment of premiums upon bonds retired by call orpurchase as provided by this article.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-19
Rights of revenue bondholders
Sec. 19. (a) The holder of revenue bonds or attached coupons andthe trustee, if any, except to the extent the rights given may berestricted by the ordinance authorizing issuance of the bonds or bythe trust indenture, may, by civil action, protect and enforce rightsgranted:
(1) by this article or IC 13-3-2 (before its repeal); or
(2) under the ordinance or trust indenture;
to be performed by the district issuing the bonds or by the board orany officer, including the making and collecting of reasonable andsufficient charges and rates for services provided by the works.
(b) If there is failure to pay the principal or interest on any of therevenue bonds on the date named for payment, and upon applicationby a bondholder or a trustee, any court having jurisdiction to appointreceivers shall appoint a receiver to administer the works on behalfof the district and the bondholders or trustee. A receiver may do thefollowing:
(1) Charge and collect rates sufficient to provide for thepayment of the expenses of operation, repair, and maintenance.
(2) Pay any revenue bonds and interest outstanding.
(3) Apply the revenues in conformity with this article and theordinance or trust indenture.
As added by P.L.1-1996, SEC.16.