CHAPTER 4. FINANCING; ISSUANCE OF BONDS; LEASES
IC 36-7.5-4
Chapter 4. Financing; Issuance of Bonds; Leases
IC 36-7.5-4-1
Development authority fund; accounts; debt service
Sec. 1. (a) The development board shall establish and administera development authority fund.
(b) The development authority fund consists of the following:
(1) Riverboat admissions tax revenue, riverboat wagering taxrevenue, or riverboat incentive payments received by a city orcounty described in IC 36-7.5-2-3(b) and transferred by thecounty or city to the fund.
(2) County economic development income tax revenue receivedunder IC 6-3.5-7 by a county or city and transferred by thecounty or city to the fund.
(3) Amounts distributed under IC 8-15-2-14.7.
(4) Food and beverage tax revenue deposited in the fund underIC 6-9-36-8.
(5) Funds received from the federal government.
(6) Appropriations to the fund by the general assembly.
(7) Other local revenue appropriated to the fund by a politicalsubdivision.
(8) Gifts, donations, and grants to the fund.
(c) The development authority shall establish a developmentauthority fund. The development board shall establish and administera general account, a lease rental account, and such other accounts inthe fund as are necessary or appropriate to carry out the powers andduties of the development authority. Except as otherwise provided bylaw or agreement with holders of any obligations of the developmentauthority, all money transferred to the development authority fundunder subsection (b)(1), (b)(2), and (b)(4) shall be deposited in thelease rental account and used only for the payment of or to secure thepayment of obligations of an eligible political subdivision under alease entered into by an eligible political subdivision and thedevelopment authority under this chapter. However, any moneydeposited in the lease rental account and not used for the purposes ofthis subsection shall be returned by the treasurer of the developmentauthority to the respective counties and cities that contributed themoney to the development authority.
(d) If the amount of money transferred to the developmentauthority fund under subsection (b)(1), (b)(2), and (b)(4) for depositin the lease rental account in any one (1) calendar year is greater thanan amount equal to:
(1) one and twenty-five hundredths (1.25); multiplied by
(2) the total of the highest annual debt service on any bondsthen outstanding to their final maturity date, which have beenissued under this article and are not secured by a lease, plus thehighest annual lease payments on any leases to their finalmaturity, which are then in effect under this article;
all or a portion of the excess may instead be deposited in the general
account.
(e) Except as otherwise provided by law or agreement with theholders of obligations of the development authority, all other moneyand revenues of the development authority may be deposited in thegeneral account or the lease rental account at the discretion of thedevelopment board. Money on deposit in the lease rental accountmay be used only to make rental payments on leases entered into bythe development authority under this article. Money on deposit in thegeneral account may be used for any purpose authorized by thisarticle.
(f) The development authority fund shall be administered by thedevelopment authority.
(g) Money in the development authority fund shall be used by thedevelopment authority to carry out this article and does not revert toany other fund.
As added by P.L.214-2005, SEC.73. Amended by P.L.182-2009(ss),SEC.425.
IC 36-7.5-4-2
Revenue transfers to fund
Sec. 2. (a) Except as provided in subsection (b), beginning in 2006the fiscal officer of each city and county described inIC 36-7.5-2-3(b) shall each transfer three million five hundredthousand dollars ($3,500,000) each year to the development authorityfor deposit in the development authority fund established undersection 1 of this chapter. However, if a county having a populationof more than one hundred forty-five thousand (145,000) but less thanone hundred forty-eight thousand (148,000) ceases to be a memberof the development authority and two (2) or more municipalities inthe county have become members of the development authority asauthorized by IC 36-7.5-2-3(i), the transfer of county economicdevelopment income tax transferred under IC 6-3.5-7-13.1(b)(4) isthe contribution of the municipalities in the county that have becomemembers of the development authority.
(b) This subsection applies only if:
(1) the fiscal body of the county described in IC 36-7.5-2-3(e)has adopted an ordinance under IC 36-7.5-2-3(e) providing thatthe county is joining the development authority;
(2) the fiscal body of the city described in IC 36-7.5-2-3(e) hasadopted an ordinance under IC 36-7.5-2-3(e) providing that thecity is joining the development authority; and
(3) the county described in IC 36-7.5-2-3(e) is an eligiblecounty participating in the development authority.
Beginning in 2007, the fiscal officer of the county described inIC 36-7.5-2-3(e) shall transfer two million six hundred twenty-fivethousand dollars ($2,625,000) each year to the development authorityfor deposit in the development authority fund established undersection 1 of this chapter. Beginning in 2007, the fiscal officer of thecity described in IC 36-7.5-2-3(e) shall transfer eight hundredseventy-five thousand dollars ($875,000) each year to the
development authority for deposit in the development authority fundestablished under section 1 of this chapter.
(c) The following apply to the transfers required by subsections(a) and (b):
(1) Except for transfers of money described in subdivision(4)(D), the transfers shall be made without appropriation by thecity or county fiscal body or approval by any other entity.
(2) Except as provided in subdivision (3), after December 31,2005, each fiscal officer shall transfer eight hundredseventy-five thousand dollars ($875,000) to the developmentauthority fund before the last business day of January, April,July, and October of each year. Food and beverage tax revenuedeposited in the fund under IC 6-9-36-8 is in addition to thetransfers required by this section.
(3) After December 31, 2006, the fiscal officer of the countydescribed in IC 36-7.5-2-3(e) shall transfer six hundred fifty-sixthousand two hundred fifty dollars ($656,250) to thedevelopment authority fund before the last business day ofJanuary, April, July, and October of each year. The county isnot required to make any payments or transfers to thedevelopment authority covering any time before January 1,2007. The fiscal officer of a city described in IC 36-7.5-2-3(e)shall transfer two hundred eighteen thousand seven hundredfifty dollars ($218,750) to the development authority fundbefore the last business day of January, April, July, and Octoberof each year. The city is not required to make any payments ortransfers to the development authority covering any time beforeJanuary 1, 2007.
(4) The transfers shall be made from one (1) or more of thefollowing:
(A) Riverboat admissions tax revenue received by the city orcounty, riverboat wagering tax revenue received by the cityor county, or riverboat incentive payments received from ariverboat licensee by the city or county.
(B) Any county economic development income tax revenuereceived under IC 6-3.5-7 by the city or county.
(C) Any other local revenue other than property tax revenuereceived by the city or county.
(D) In the case of a county described in IC 36-7.5-2-3(e) ora city described in IC 36-7.5-2-3(e), any money from themajor moves construction fund that is distributed to thecounty or city under IC 8-14-16.
As added by P.L.214-2005, SEC.73. Amended by P.L.47-2006,SEC.61; P.L.182-2009(ss), SEC.426.
IC 36-7.5-4-3
Bond issues
Sec. 3. (a) Subject to subsection (h), the development authoritymay issue bonds for the purpose of obtaining money to pay the costof: (1) acquiring real or personal property, including existingcapital improvements;
(2) acquiring, constructing, improving, reconstructing, orrenovating one (1) or more projects; or
(3) funding or refunding bonds issued under this chapter orIC 8-5-15, IC 8-22-3, IC 36-7-13.5, or IC 36-9-3 or prior law.
(b) The bonds are payable solely from:
(1) the lease rentals from the lease of the projects for which thebonds were issued, insurance proceeds, and any other fundspledged or available; and
(2) except as otherwise provided by law, revenue received bythe development authority and amounts deposited in thedevelopment authority fund.
(c) The bonds shall be authorized by a resolution of thedevelopment board.
(d) The terms and form of the bonds shall either be set out in theresolution or in a form of trust indenture approved by the resolution.
(e) The bonds shall mature within forty (40) years.
(f) The board shall sell the bonds only to the Indiana financeauthority established by IC 4-4-11-4 upon the terms determined bythe development board and the Indiana finance authority.
(g) All money received from any bonds issued under this chaptershall be applied solely to the payment of the cost of acquiring,constructing, improving, reconstructing, or renovating one (1) ormore projects, or the cost of refunding or refinancing outstandingbonds, for which the bonds are issued. The cost may include:
(1) planning and development of equipment or a facility and allbuildings, facilities, structures, equipment, and improvementsrelated to the facility;
(2) acquisition of a site and clearing and preparing the site forconstruction;
(3) equipment, facilities, structures, and improvements that arenecessary or desirable to make the project suitable for use andoperations;
(4) architectural, engineering, consultant, and attorney's fees;
(5) incidental expenses in connection with the issuance and saleof bonds;
(6) reserves for principal and interest;
(7) interest during construction;
(8) financial advisory fees;
(9) insurance during construction;
(10) municipal bond insurance, debt service reserve insurance,letters of credit, or other credit enhancement; and
(11) in the case of refunding or refinancing, payment of theprincipal of, redemption premiums (if any) for, and interest on,the bonds being refunded or refinanced.
(h) The development authority may not issue bonds under thisarticle unless the development authority first finds that each contractfor the construction of a facility and all buildings, facilities,structures, and improvements related to that facility to be financed in
whole or in part through the issuance of the bonds requires paymentof the common construction wage required by IC 5-16-7.
As added by P.L.214-2005, SEC.73. Amended by P.L.1-2006,SEC.573.
IC 36-7.5-4-4
Bonding; complete authority
Sec. 4. This chapter contains full and complete authority for theissuance of bonds. No law, procedure, proceedings, publications,notices, consents, approvals, orders, or acts by the developmentboard or any other officer, department, agency, or instrumentality ofthe state or of any political subdivision is required to issue anybonds, except as prescribed in this article.
As added by P.L.214-2005, SEC.73.
IC 36-7.5-4-5
Bonding; security; trust indenture
Sec. 5. (a) The development authority may secure bonds issuedunder this chapter by a trust indenture between the developmentauthority and a corporate trustee, which may be any trust companyor national or state bank within Indiana that has trust powers.
(b) The trust indenture may:
(1) pledge or assign revenue received by the developmentauthority, amounts deposited in the development authority fund,and lease rentals, receipts, and income from leased projects, butmay not mortgage land or projects;
(2) contain reasonable and proper provisions for protecting andenforcing the rights and remedies of the bondholders, includingcovenants setting forth the duties of the development authorityand development board;
(3) set forth the rights and remedies of bondholders andtrustees; and
(4) restrict the individual right of action of bondholders.
(c) Any pledge or assignment made by the development authorityunder this section is valid and binding in accordance withIC 5-1-14-4 from the time that the pledge or assignment is made,against all persons whether they have notice of the lien or not. Anytrust indenture by which a pledge is created or an assignment madeneed not be filed or recorded. The lien is perfected against thirdparties in accordance with IC 5-1-14-4.
As added by P.L.214-2005, SEC.73.
IC 36-7.5-4-6
Bond refunding; leases
Sec. 6. (a) Bonds issued under IC 8-5-15, IC 8-22-3, IC 36-7-13.5,or IC 36-9-3 or prior law may be refunded as provided in this section.
(b) An eligible political subdivision may:
(1) lease all or a portion of land or a project or projects to thedevelopment authority, which may be at a nominal lease rentalwith a lease back to the eligible political subdivision,
conditioned upon the development authority assuming bondsissued under IC 8-5-15, IC 8-22-3, IC 36-7-13.5, or IC 36-9-3 orprior law and issuing its bonds to refund those bonds; and
(2) sell all or a portion of land or a project or projects to thedevelopment authority for a price sufficient to provide for therefunding of those bonds and lease back the land or project orprojects from the development authority.
As added by P.L.214-2005, SEC.73.
IC 36-7.5-4-7
Leases; findings
Sec. 7. (a) Before a lease may be entered into by an eligiblepolitical subdivision under this chapter, the eligible politicalsubdivision must find that the lease rental provided for is fair andreasonable.
(b) A lease of land or a project from the development authority toan eligible political subdivision:
(1) may not have a term exceeding forty (40) years;
(2) may not require payment of lease rentals for a newlyconstructed project or for improvements to an existing projectuntil the project or improvements to the project have beencompleted and are ready for occupancy or use;
(3) may contain provisions:
(A) allowing the eligible political subdivision to continue tooperate an existing project until completion of theacquisition, improvements, reconstruction, or renovation ofthat project or any other project; and
(B) requiring payment of lease rentals for land, for anexisting project being used, reconstructed, or renovated, orfor any other existing project;
(4) may contain an option to renew the lease for the same orshorter term on the conditions provided in the lease;
(5) must contain an option for the eligible political subdivisionto purchase the project upon the terms stated in the lease duringthe term of the lease for a price equal to the amount required topay all indebtedness incurred on account of the project,including indebtedness incurred for the refunding of thatindebtedness;
(6) may be entered into before acquisition or construction of aproject;
(7) may provide that the eligible political subdivision shallagree to:
(A) pay any taxes and assessments on the project;
(B) maintain insurance on the project for the benefit of thedevelopment authority;
(C) assume responsibility for utilities, repairs, alterations,and any costs of operation; and
(D) pay a deposit or series of deposits to the developmentauthority from any funds legally available to the eligiblepolitical subdivision before the commencement of the lease
to secure the performance of the eligible politicalsubdivision's obligations under the lease; and
(8) shall provide that the lease rental payments by the eligiblepolitical subdivision shall be made from the developmentauthority fund established by section 1 of this chapter and mayprovide that the lease rental payments by the eligible politicalsubdivision shall be made from:
(A) net revenues of the project;
(B) any other funds available to the eligible politicalsubdivision; or
(C) both sources described in clauses (A) and (B).
As added by P.L.214-2005, SEC.73.
IC 36-7.5-4-8
Leases; complete authority
Sec. 8. This chapter contains full and complete authority forleases between the development authority and an eligible politicalsubdivision. No law, procedure, proceedings, publications, notices,consents, approvals, orders, or acts by the development authority orthe eligible political subdivision or any other officer, department,agency, or instrumentality of the state or any political subdivision isrequired to enter into any lease, except as prescribed in this article.
As added by P.L.214-2005, SEC.73.
IC 36-7.5-4-9
Plans; approval
Sec. 9. If the lease provides for a project or improvements to aproject to be constructed by the development authority, the plans andspecifications shall be submitted to and approved by all agenciesdesignated by law to pass on plans and specifications for publicbuildings.
As added by P.L.214-2005, SEC.73.
IC 36-7.5-4-10
Agreements; common wall; easements; licenses
Sec. 10. The development authority and an eligible politicalsubdivision may enter into common wall (party wall) agreements orother agreements concerning easements or licenses. Theseagreements shall be recorded with the recorder of the county inwhich the project is located.
As added by P.L.214-2005, SEC.73.
IC 36-7.5-4-11
Leases or sale of projects or land to authority
Sec. 11. (a) An eligible political subdivision may lease for anominal lease rental, or sell to the development authority, one (1) ormore projects or portions of a project or land upon which a projectis located or is to be constructed.
(b) Any lease of all or a portion of a project by an eligiblepolitical subdivision to the development authority must be for a term
equal to the term of the lease of that project back to the eligiblepolitical subdivision.
(c) An eligible political subdivision may sell property to thedevelopment authority for the amount the eligible politicalsubdivision determines to be in the best interest of the eligiblepolitical subdivision. The development authority may pay thatamount from the proceeds of bonds of the development authority.
As added by P.L.214-2005, SEC.73.
IC 36-7.5-4-12
Option to purchase property
Sec. 12. If an eligible political subdivision exercises its option topurchase leased property, the eligible political subdivision may issueits bonds as authorized by statute.
As added by P.L.214-2005, SEC.73.
IC 36-7.5-4-13
Tax exemption
Sec. 13. (a) All:
(1) property owned by the development authority;
(2) revenues of the development authority; and
(3) bonds issued by the development authority, the interest onthe bonds, the proceeds received by a holder from the sale ofbonds to the extent of the holder's cost of acquisition, proceedsreceived upon redemption before maturity, proceeds received atmaturity, and the receipt of interest in proceeds;
are exempt from taxation in Indiana for all purposes except thefinancial institutions tax imposed under IC 6-5.5 or a stateinheritance tax imposed under IC 6-4.1.
(b) All securities issued under this chapter are exempt from theregistration requirements of IC 23-19 and other securities registrationstatutes.
As added by P.L.214-2005, SEC.73. Amended by P.L.27-2007,SEC.35.
IC 36-7.5-4-14
Bonds; legal investments
Sec. 14. Bonds issued under this chapter are legal investments forprivate trust funds and the funds of banks, trust companies, insurancecompanies, building and loan associates, credit unions, savingsbanks, private banks, loan and trust and safe deposit companies, ruralloan and savings associations, guaranty loan and savingsassociations, mortgage guaranty companies, small loan companies,industrial loan and investment companies, and other financialinstitutions organized under Indiana law.
As added by P.L.214-2005, SEC.73.
IC 36-7.5-4-15
Bonds; contesting validity
Sec. 15. An action to contest the validity of bonds to be issued
under this chapter may not be brought after the time limitations setforth in IC 5-1-14-13.
As added by P.L.214-2005, SEC.73.
IC 36-7.5-4-16
Transfers; failure to make; duty of state treasurer
Sec. 16. (a) This section applies if:
(1) a city or county described in IC 36-7.5-2-3 fails to make atransfer or a part of a transfer required by section 2 of thischapter; and
(2) the development authority has bonds or other debt or leaseobligations outstanding.
(b) The treasurer of state shall do the following:
(1) Deduct from amounts otherwise payable to the city or townunder IC 4-33-12 or IC 4-33-13 an amount equal to the amountof the transfer or part of the transfer under section 2 of thischapter that the city or county failed to make.
(2) Pay the amount deducted under subdivision (1) to thedevelopment authority.
As added by P.L.214-2005, SEC.73.
IC 36-7.5-4-17
Covenant with holders
Sec. 17. (a) If there are bonds outstanding that have been issuedunder this article and are not secured by a lease, or if there are leasesin effect under this article, the general assembly also covenants thatit will not reduce the amount required to be transferred from thecounties and cities to the development authority under section 2 ofthis chapter below an amount that would produce one andtwenty-five hundredths (1.25) multiplied by the total of the highestannual debt service on the bonds to their final maturity plus thehighest annual lease payments on the leases to their final terminationdate.
(b) The general assembly also covenants that it will not:
(1) repeal or amend this article in a manner that wouldadversely affect owners of outstanding bonds, or the paymentof lease rentals, secured by the amounts pledged under thischapter; or
(2) in any way impair the rights of owners of bonds of thedevelopment authority, or the owners of bonds secured by leaserentals, secured by a pledge of revenues under this chapter;
except as otherwise set forth in subsection (a).
As added by P.L.214-2005, SEC.73.