CHAPTER 24. LEASING OF SEWAGE DISPOSAL FACILITIES
IC 36-9-24
Chapter 24. Leasing of Sewage Disposal Facilities
IC 36-9-24-1
Application of chapter
Sec. 1. This chapter applies to all municipalities that own andoperate sewage works under IC 36-9-23.
As added by Acts 1981, P.L.309, SEC.97.
IC 36-9-24-2
"Sewage disposal facilities" defined
Sec. 2. As used in this chapter, "sewage disposal facilities" meansall or part of the facilities of a sewage disposal company furnishingservice within the corporate boundaries of a municipality, or withinone (1) mile outside those boundaries, including:
(1) certificates of territorial authority;
(2) indeterminate permits;
(3) franchises;
(4) rights-of-way; and
(5) easements;
but does not include the company's corporate stock, going-concernvalue, or good will.
As added by Acts 1981, P.L.309, SEC.97.
IC 36-9-24-3
Authorization
Sec. 3. (a) A municipality may lease sewage disposal facilitiesfrom a sewage disposal company that:
(1) holds a certificate of territorial authority under IC 8-1-2-89;and
(2) is a corporation organized under Indiana law for the purposeof acquiring, constructing, and leasing sewage disposal facilitiesto a municipality.
(b) In addition to the authority described in subsection (a), amunicipality may lease from any person facilities to provide fortreatment or disposal of sludge generated by the municipality'ssewage works. The lessor under this subsection may be an individual,partnership, corporation, or other entity organized to lease sewageworks to a municipality. Notwithstanding any other law, a lessor mayacquire, construct, and lease facilities described in this subsection toa municipality without the approval of the utility regulatorycommission.
(c) The municipality may operate the leased facilities inconjunction with the operation of the municipally owned sewageworks.
As added by Acts 1981, P.L.309, SEC.97. Amended by P.L.5-1988,SEC.222; P.L.186-1988, SEC.2.
IC 36-9-24-4
Maximum duration; options to renew Sec. 4. The term of a lease under this chapter may not exceed fifty(50) years. However, the lease must provide that the municipality hasan option to renew the lease for a further term on similar conditions.
As added by Acts 1981, P.L.309, SEC.97.
IC 36-9-24-5
Options to purchase; authorization of bonds to finance purchase;disposition of property when option not exercised
Sec. 5. (a) A lease under this chapter must provide that themunicipality has an option to purchase the property covered by thelease, under the terms and conditions specified in the lease.
(b) If the municipality exercises the option to purchase, it mayobtain money to pay the purchase price by issuing and sellingrevenue bonds under the statutes governing the issuance and sale ofsewage works revenue bonds for additions and extensions to themunicipally owned sewage works.
(c) If the municipality does not exercise the option to purchase,the property covered by the lease becomes the absolute property ofthe municipality when:
(1) the lease has expired; and
(2) the municipality has discharged and performed all itsobligations under the lease.
The lessor shall then execute proper instruments conveying good andmerchantable title to the property to the municipality.
As added by Acts 1981, P.L.309, SEC.97.
IC 36-9-24-6
Optional provisions of leases; payment of taxes, assessments,insurance, and maintenance expenses
Sec. 6. (a) A lease under this chapter may provide that:
(1) as part of the lease rental for the facilities, the municipalityshall agree to:
(A) pay all property taxes and assessments levied against oron account of the facilities; and
(B) maintain insurance on the facilities for the benefit of thelessor; and
(2) the municipality shall assume all responsibilities for theoperation, maintenance, repair, alteration, and extension of thefacilities.
(b) However, the lease rental and the expenses incurred under thischapter are payable solely from the revenues derived from sewageand sewer fees to be collected by the municipality from property andusers in the area served by the facilities.
As added by Acts 1981, P.L.309, SEC.97. Amended by P.L.186-1988,SEC.3.
IC 36-9-24-7
Proposed leases; notice and hearing
Sec. 7. (a) When a municipality and a lessor agree on the termsand conditions of a lease proposed to be entered into under this
chapter, notice of a hearing to be held before the municipallegislative body shall be given to all interested persons bypublication in accordance with IC 5-3-1. The notice must name thedate, place, and hour of the hearing, and set forth a summary of theprincipal terms of the lease agreed upon, including the name of thelessor, the character of the property to be leased, the lease rental tobe paid, and the number of years the lease is to be in effect.
(b) The date of the hearing may not be less than twenty (20) daysafter publication of the notice.
(c) The proposed lease shall be kept available for inspection bythe public before and at the hearing.
(d) At the hearing, all interested persons are entitled to be heardas to the necessity for the execution of the lease and whether therental to be paid to the proposed lessor under the lease is a fair andreasonable rental for the facilities. The hearing may be adjourned toa later date or dates.
(e) After the hearing, the municipal legislative body mayauthorize the execution of the lease as originally agreed on, or may,with the consent of the proposed lessor, modify the lease. However,the lease rental as set out in the published notice may not beincreased without a new notice and hearing.
As added by Acts 1981, P.L.309, SEC.97. Amended by Acts 1981,P.L.45, SEC.63; P.L.186-1988, SEC.4.
IC 36-9-24-8
Notice of signing of lease contract; petitions, notice, and hearingconcerning objections to lease rental
Sec. 8. (a) When a municipal legislative body authorizes theexecution of a lease under section 7 of this chapter, notice of thesigning of the contract shall be given by publication in the mannerprescribed by section 7 of this chapter. Within thirty (30) days afterpublication of the notice, fifty (50) or more of the:
(1) users in the municipality served by the municipally ownedsewage works; or
(2) users served by the facilities to be leased;
may file with the utility regulatory commission (if the lessor isleasing facilities under section 3(a) of this chapter), or with thecircuit or superior court of the county where the facility is located (ifthe lessor is leasing facilities under section 3(b) of this chapter), apetition setting forth their objections to the lease rental, includingfacts showing that the lease rental is not fair and reasonable.
(b) On receipt of the petition, the commission or the court shallfix a time and place for a hearing on whether the lease rental is fairand reasonable. The hearing may not be less than twenty (20) normore than sixty (60) days after the commission's or the court's receiptof the petition. At least ten (10) days before the date of the hearing,the commission or the court shall mail notice of the hearing to:
(1) the municipal executive;
(2) the municipality; and
(3) the first ten (10) petitioners listed on the petition, at their
usual place of residence.
(c) The decision of the commission or the court as to whether thelease rental is fair and reasonable is final.
As added by Acts 1981, P.L.309, SEC.97. Amended by P.L.23-1988,SEC.126; P.L.186-1988, SEC.5.
IC 36-9-24-9
Limitations on actions to contest leases
Sec. 9. An action to contest the validity of a lease under thischapter, or to enjoin the performance of any of the terms andconditions of such a lease, may not be instituted later than:
(1) thirty (30) days after publication of notice under section 8(a)of this chapter; or
(2) if a petition has been filed with the utility regulatorycommission or the court twenty (20) days after the decision ofthe commission or the court.
As added by Acts 1981, P.L.309, SEC.97. Amended by P.L.23-1988,SEC.127; P.L.186-1988, SEC.6.
IC 36-9-24-10
Determination of sufficiency by department of environmentalmanagement
Sec. 10. A lease under this chapter does not become effective untilits provisions for sewage treatment have been found sufficient by thedepartment of environmental management according to rules adoptedby the state water pollution control board.
As added by Acts 1981, P.L.309, SEC.97. Amended by P.L.143-1985,SEC.201.
IC 36-9-24-11
Fees; establishment; procedure
Sec. 11. (a) A municipality that leases facilities under this chaptermay, by ordinance, establish, bill, and collect fees from the propertyand users in the area served by the leased facilities. The fees must besufficient to pay the costs of operation, maintenance, repair,alterations, depreciation, additions, and extensions of the leasedfacilities, and to pay the lease rental as it becomes due.
(b) The municipal legislative body may use one (1) or more of thefollowing factors to establish the fees:
(1) A flat charge for each sewer connection.
(2) The amount of water used on or in the property.
(3) The number and size of water outlets on the property.
(4) The amount, strength, or character of the sewage dischargedinto the sewers.
(5) The size of sewer connections.
(6) Any other factors the legislative body considers necessary.
(c) After introduction of the ordinance establishing the fees, butbefore it is finally adopted, the municipal legislative body shall holda public hearing at which all of the users of the leased facilities andowners of property served or to be served by the facilities may be
heard concerning the proposed fees. Notice of the hearing, settingforth the proposed schedule of fees, shall be published in accordancewith IC 5-3-1. The hearing may be adjourned from time to time.
(d) After the hearing, the municipal legislative body shall adoptthe ordinance establishing the fees, either as originally introduced oras modified.
(e) The fees established for any class of users shall be extendedto cover any additional property that is subsequently served and fallswithin the same class, without any hearing or notice.
(f) The municipal legislative body may change or readjust the feesin the same manner by which they were established.
(g) The fees established and collected by the municipality are notsubject to the jurisdiction of the utility regulatory commission.
(h) The municipality may collect delinquent fees in the mannerprovided by IC 36-9-23-31 through IC 36-9-23-34.
As added by Acts 1981, P.L.309, SEC.97. Amended by Acts 1981,P.L.45, SEC.64; P.L.23-1988, SEC.128; P.L.186-1988, SEC.7.
IC 36-9-24-12
Tax liability and exemptions
Sec. 12. Facilities leased to a municipality under this chapter areexempt from all state, county, and other taxes. However, the rentalpaid to a lessor under the terms of such a lease is subject to allapplicable taxes.
As added by Acts 1981, P.L.309, SEC.97. Amended by P.L.186-1988,SEC.8.
IC 36-9-24-13
Exception from compliance with certain statutes
Sec. 13. Except as specifically required in this chapter, amunicipality acting under this chapter need not comply with otherstatutes concerning the lease and acquisition of facilities bymunicipalities.
As added by Acts 1981, P.L.309, SEC.97. Amended by P.L.186-1988,SEC.9.
IC 36-9-24-14
Operation and lease of facilities within one mile of boundariesconsidered furnishing of sewage and sewer service
Sec. 14. A municipality that leases and operates sewage disposalfacilities in an area within one (1) mile outside its corporateboundaries is considered to be furnishing sewage and sewer servicein that area for purposes of IC 36-4-3-13.
As added by Acts 1981, P.L.309, SEC.97.