CHAPTER 32. FINANCING OF PUBLIC IMPROVEMENTS IN MUNICIPALITIES
IC 36-9-32
Chapter 32. Financing of Public Improvements in Municipalities
IC 36-9-32-1
Application of chapter
Sec. 1. This chapter applies to all municipalities.
As added by P.L.23-1984, SEC.18.
IC 36-9-32-2
Legislative findings and declaration
Sec. 2. It is found and declared that municipalities in Indiana havea need to finance public improvements to provide for industrial andcommercial growth and for general public use. Therefore, the generalassembly finds it necessary and proper to provide an alternativemethod for municipalities to finance public improvements, to providefor industrial and commercial growth, to provide employmentopportunities, diversification of industry and commerce, and toprovide general public access to those public improvements. It isdeclared that the financing of public improvements for use by thegeneral public, including industrial and commercial enterprises, is apublic purpose.
As added by P.L.23-1984, SEC.18.
IC 36-9-32-3
Definitions
Sec. 3. As used in this chapter:
"Public improvements" means:
(1) any improvement, as defined in this article;
(2) any improvement, including the construction, equipping,remodeling, extension, repair, and betterment of anymunicipally owned utility, as defined in IC 8-1-2-1; or
(3) any acquisition or improvement of real estate upon whichsuch an improvement is to be located or that will itselfconstitute a public improvement.
"System" means any sewage works or municipally owned utility,as defined in IC 8-1-2-1.
As added by P.L.23-1984, SEC.18.
IC 36-9-32-4
Loan agreements; loan of grant proceeds; pledge of revenues to securebonds
Sec. 4. A municipality may enter into a loan agreement with anyperson and loan the proceeds of any grant received by themunicipality to that person with the repayment of the loan to besecured by the pledge of a note or other secured or unsecured debtobligation of that person. The municipality may pledge the revenuesfrom the note or other secured or unsecured debt obligation of thatperson or of any entity organized for economic developmentpurposes to the payment of bonds issued under this chapter. In noevent may a municipality pledge revenues other than from the
sources authorized in this chapter as security for the bonds issuedunder this chapter. A municipality may not issue bonds under thischapter if principal and interest payments on those bonds wouldexceed revenues to be derived by the municipality from the notes orother secured or unsecured debt obligations of any person that hasentered into a loan agreement with the municipality under thischapter, or from other sources of principal and interest paymentsunder this chapter. Any municipality may issue bonds under thischapter whether the revenues pledged to secure the bonds are to bederived from a loan agreement entered into before or after March 1,1984. The validity of any bonds issued under this chapter is notdependent on or affected by the validity of the loan agreement at thetime it was executed and delivered. All loan agreements betweenmunicipalities and persons borrowing grant proceeds entered intobefore March 1, 1984, are fully legalized and declared valid.
As added by P.L.23-1984, SEC.18.
IC 36-9-32-5
Public improvements connected to an existing system; payment ofbonds; letting of contracts; ownership or operation of improvements
Sec. 5. (a) If a public improvement financed under this chapter isconnected to a system, the public improvement becomes a part of theexisting system. Any person entering into a loan agreement with amunicipality under this chapter shall pay rates and charges or fees forthe use of that system in the same manner any other member of thegeneral public is required to pay such rates and charges or fees. Themunicipality may not establish rates and charges or fees for the useof that system that include a revenue requirement for payment ofprincipal and interest on bonds issued under this chapter. Bondsissued under this chapter are payable solely from revenues derivedfrom notes or other secured or unsecured obligations of any personentering into a loan agreement with a municipality under this chapter,or from other sources of principal and interest payments under thischapter, and not from revenues of the system.
(b) Contracts for public improvements under this chapter shall belet in accordance with statutes relating to public works and publicpurchases.
(c) Public improvements may be financed under this chapter evenif the municipality building or acquiring those improvements will notown or operate those improvements, so long as the publicimprovements will be owned or operated by a political subdivision.
As added by P.L.23-1984, SEC.18.
IC 36-9-32-6
Ordinances approving issuance of bonds
Sec. 6. If the legislative body finds that the issuance of bondsunder this chapter will be of benefit to the health or welfare of themunicipality and serves the public purpose set forth in section 2 ofthis chapter, it may adopt an ordinance approving the issuance ofbonds under this chapter. The municipality may publish a notice of
a hearing regarding the public purpose of the issuance of the bondsand any other matter and, if the notice is published, it shall bepublished in accordance with IC 5-3-1.
As added by P.L.23-1984, SEC.18.
IC 36-9-32-7
Bonds; issuance and sale; payment; ordinances; amount; validity;taxation; refunding bonds; security registration
Sec. 7. (a) The municipality may issue and sell bonds to providemoney for any public improvement under this chapter.
(b) The bonds and interest on them are payable only out of aspecial fund, to be established as provided in this chapter. The bondsdo not constitute an indebtedness of the municipality within themeaning of any constitutional limitation. Each bond must stateplainly on its face that it is payable only from a special fund and thatit does not constitute an indebtedness of the municipality within themeaning of any constitutional debt limitation. Neither the faith andcredit nor the taxing power of the municipality is or may be pledgedfor the payment of the principal of, premium (if any) on, or intereston bonds issued under this chapter. An owner of bonds issued underthis chapter is not entitled to compel the exercise of the taxing powerby the municipality or the forfeiture of any of its property inconnection with any default on bonds issued under this chapter.
(c) Bonds issued under this chapter may be sold at public orprivate sale for the price, in the manner, and at the time determinedby the legislative body.
(d) The ordinance of the legislative body authorizing the bondsmust provide, either in the body of the ordinance or by incorporatinganother document by reference:
(1) the manner of their execution;
(2) their term or terms, which may not exceed forty (40) years;
(3) their interest rate;
(4) their denominations;
(5) their form;
(6) the medium of their payments;
(7) the place and manner of their payment;
(8) the terms of their redemption, if any; and
(9) any other provisions not inconsistent with this chapter.
(e) The bonds may be issued in an amount sufficient to pay all orany part of the cost of any public improvement authorized by thischapter including the funding of interest in an amount to bedetermined by the legislative body, the establishment of reserves tosecure payment of such bonds, and the payment of all other costs orexpenses incident to and necessary or convenient to carry out thepurposes and powers authorized by this chapter.
(f) The bonds and their authorization, issuance, sale, and deliveryare not subject to any general statute concerning bonds.
(g) An action to contest the validity of bonds issued under thischapter may not be commenced more than fifteen (15) days afterpublication of notice of the adoption of the ordinance approving
them. The bonds are conclusively presumed to be valid after thatperiod has passed.
(h) Any bonds issued under this chapter are exempt from taxationas provided in IC 6-8-5.
(i) If the legislative body finds that a refunding of outstandingbonds issued under this chapter would be of benefit to themunicipality, it may authorize the issuance of refunding bondspayable solely from revenues derived from notes or other secured orunsecured obligations of any person that has entered into a loanagreement with a municipality under this chapter, or from escrowedbond proceeds or other sources of principal and interest paymentsunder this chapter. Refunding bonds shall be issued in the samemanner as bonds issued under this chapter and are payable only fromsources set forth in this chapter.
(j) Any bond issued under this chapter is exempt from anysecurity registration requirements provided for in Indiana statutes.
As added by P.L.23-1984, SEC.18.
IC 36-9-32-8
Trust indentures to secure bonds
Sec. 8. The legislative body may secure bonds issued under thischapter by a trust indenture between the municipality and a corporatetrustee. The corporate trustee may be any trust company, nationalbank, or state bank that is in Indiana and has trust powers. A trustindenture entered into under this section may contain any provisionsagreed upon by the municipality and the trustee that are notinconsistent with this chapter.
As added by P.L.23-1984, SEC.18.
IC 36-9-32-9
Enforcement by owner of bonds or trustee
Sec. 9. Any owner of bonds issued under this chapter, and thetrustee under any trust agreement entered into under this chapter,except to the extent that the trustee's rights are restricted by the trustagreement, may:
(1) either at law or in equity, by suit, action, or otherproceeding, protect and enforce any and all rights of such ownerof bonds or trustee under state law, or, to the extent permittedby law, under the trust agreement, or under any loan agreemententered into under this chapter; and
(2) enforce and compel the performance of all duties requiredby this chapter or by any trust agreement or loan agreemententered into under this chapter to be performed by anymunicipality or by any officer of any municipality.
As added by P.L.23-1984, SEC.18.
IC 36-9-32-10
Impairment of rights and remedies of owners of bonds
Sec. 10. The state covenants and agrees with the owners of anybonds issued under this chapter that so long as any bonds of a
municipality issued under this chapter are outstanding or unpaid, thestate will not in any way impair the rights and remedies of theowners of the bonds, until the bonds, together with interest on them,interest on any unpaid installment of interest, and all costs andexpenses in connection with any action or proceedings by or onbehalf of the owners, are fully paid, met, and discharged.
As added by P.L.23-1984, SEC.18.
IC 36-9-32-11
Liability for property and special taxing district taxes
Sec. 11. Any person entering into a loan agreement with amunicipality under this chapter is liable for property taxes, andspecial taxing district taxes for any public improvements, if specialbenefits are provided to that person together with other personsresiding in the special taxing district. This section does not deny anytax exemption that such a person may have under other statutesbecause of the nature of that person's property or that person.
As added by P.L.23-1984, SEC.18.