CHAPTER 8. LOANS TO QUALIFIED ENTITIES

IC 5-1.5-8
    Chapter 8. Loans to Qualified Entities

IC 5-1.5-8-1
Purchase of securities offered by qualified entity; private sale;issuance of bonds and notes for purpose of purchase
    Sec. 1. The bank, to carry out the purposes and policies of thisarticle, may purchase securities of the qualified entity.Notwithstanding any law to the contrary, a qualified entity may sellits securities to the bank at a negotiated, private sale. The bank, forthis purpose, may issue its bonds and notes payable solely from therevenues or funds available to the bank for such payment and mayotherwise assist qualified entities as provided in this article.
As added by P.L.25-1984, SEC.1. Amended by P.L.28-1992, SEC.3.

IC 5-1.5-8-2
Securities to be purchased and held in name of bank; requireddocumentation
    Sec. 2. (a) All securities at any time purchased, held, or owned bythe bank shall at all times be purchased and held in the name of thebank.
    (b) Except for agreements described in IC 5-1.5-1-10(4), allsecurities at any time purchased by the bank, upon delivery to thebank, shall, unless waived by the board, be accompanied by alldocumentation required by the board that shall include an approvingopinion of recognized bond counsel, certification and guarantee ofsignatures, and certification as to no litigation pending as of the dateof delivery of the securities challenging the validity or issuance ofsuch securities.
As added by P.L.25-1984, SEC.1. Amended by P.L.44-1990, SEC.3;P.L.28-1992, SEC.4.

IC 5-1.5-8-3
Contracts with bank; terms and conditions; fees and charges;denomination and prices
    Sec. 3. (a) Every qualified entity is authorized and empowered tocontract with the bank with respect to the loan or purchase of itssecurities, and the contracts shall contain the terms and conditions ofthe loan or purchase and may be in any form agreed to by the bankand the qualified entity, including a customary form of bondordinance or resolution. Every qualified entity is authorized andempowered to pay fees and charges required to be paid to the bankfor its services.
    (b) Notwithstanding any statute applicable to or constituting anylimitation on the sale of bonds or notes or on entry into anagreement, any qualified entity may sell its securities to the bank,without limitation as to denomination, at a private sale at such priceor prices as may be determined by the bank and the qualified entity.
    (c) Notwithstanding any law that applies to or constitutes alimitation on the leasing or disposition of materials or other property,

and subject to subsection (d), any qualified entity, or any purchasingagency (as defined in IC 5-22-2-25) of a qualified entity, may:
        (1) assign or sell a lease or purchase contract for property to thebank;
        (2) enter into a lease or purchase contract for property with thebank; or
        (3) buy property from or sell property to the bank;
at any price and under any other terms and conditions as may bedetermined by the bank and the qualified entity.
    (d) This subsection does not apply to a school corporation thatbuys or leases a school bus from the bank under IC 5-1.5-4-1(a)(5).Before taking an action described under subsection (c)(1) through(c)(3) that would otherwise be subject to IC 5-22, a qualified entityor its purchasing agent must obtain or cause to be obtained apurchase price for the property to be subject to the sale, purchasecontract, or lease from the lowest responsible and responsive bidderin accordance with the requirements for the purchase of suppliesunder IC 5-22.
As added by P.L.25-1984, SEC.1. Amended by P.L.46-1987, SEC.14;P.L.48-1989, SEC.2; P.L.49-1997, SEC.25; P.L.192-2006, SEC.2.

IC 5-1.5-8-4
Agreement with bank; waiver of statutory defenses tononpayment; rights and remedies of bank
    Sec. 4. Upon the sale and delivery by a qualified entity of anysecurities to the bank, the qualified entity shall be deemed to haveagreed that upon its failure to pay interest or principal on thesecurities owned or held by or arising from an agreement with thebank when payable, all statutory defenses to nonpayment are waived.Upon nonpayment and demand on the qualified entity for payment,if the securities are payable from property taxes and funds are notavailable in the treasury of the qualified entity to make payment, anaction in mandamus for the levy of a tax to pay the interest andprincipal on the securities shall lie, and the bank shall be constituteda holder or owner of the securities as being in default. The bank maythereupon avail itself of all remedies, rights, and provisions of lawapplicable in the circumstances, and the failure to exercise or exertany rights or remedies within a time or period provided by law maynot be raised as a defense by the qualified entity. The bank may carryout this section and exercise all the rights, remedies, and provisionsof law provided or referred to in this section.
As added by P.L.25-1984, SEC.1. Amended by P.L.46-1987, SEC.15.

IC 5-1.5-8-5
Department or agency of state as custodian of money payable toqualified entity; duty on default on payment of principal or interestby qualified entity
    Sec. 5. Notwithstanding any other provision of law, to the extentthat any department or agency of the state, including the treasurer ofstate, is the custodian of money payable to the qualified entity (other

than for goods or services provided by the qualified entity), at anytime after written notice to the department or agency head from thebank that the qualified entity is in default on the payment of principalor interest on the securities of the qualified entity then held or ownedby or arising from an agreement with the bank, the department oragency shall withhold the payment of that money from that qualifiedentity and pay over the money to the bank for the purpose of payingprincipal of and interest on bonds of the bank. However, thewithholding of payment from the qualified entity and payment to thebank under this section must not adversely affect the validity of thesecurity in default.
As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.26;P.L.46-1987, SEC.16.

IC 5-1.5-8-6
Repealed
    (Repealed by P.L.43-1985, SEC.28.)

IC 5-1.5-8-6.1
Anticipation notes; issuance and purchase
    Sec. 6.1. (a) Notwithstanding any law applicable to a qualifiedentity concerning the issuance of bonds, a qualified entity that hascomplied with all statutory requirements for the issuance of its bondsmay, in lieu of issuing bonds at that time and without the need forcomplying with any other law applicable to the issuance of bonds,notes, or other evidences of indebtedness, issue its notes inanticipation of the issuance of bonds to the bank, and the bank maypurchase the bond anticipation notes. The bond anticipation notesmay be issued on terms set forth in a resolution authorizing theirissuance and in any amount equal to or less than the amount of bondsauthorized to be issued. The qualified entity may renew or extend thebond anticipation notes from time to time on terms agreed to with thebank, and the bank may purchase the renewals or extensions. Theamount of the accrued interest on the date of renewal or extensionmay be paid or added to the principal amount of the note beingrenewed or extended so long as the aggregate principal amount ofbond anticipation notes outstanding at any time does not exceed themaximum principal amount permitted by this section. The bondanticipation notes of the qualified entity, including any renewals orextensions, must mature in the amounts and at the times (notexceeding five (5) years from the date of the original issuance of thebond anticipation notes) agreed to by the qualified entity and thebank. The bond anticipation notes must be finally paid, and intereston the bond anticipation notes may be finally paid, with the proceedsof the bonds issued by the qualified entity. In connection with theissuance of bonds part or all of the proceeds of which will be used toretire the bond anticipation notes, it is not necessary for the qualifiedentity to repeat the procedures for the issuance of bonds, as theprocedures followed before the issuance of the bond anticipationnotes are for all purposes sufficient to authorize the issuance of the

bonds.
    (b) In connection with the purchase of bond anticipation notes, thebank may by agreement with the qualified entity impose any terms,conditions, and limitations as in its opinion are proper for thesecurity of the bank and the holders of its bonds or notes. If thequalified entity fails to comply with the agreement or to issue itsbonds to retire its bond anticipation notes, the bank may enforce allrights and remedies provided in the agreement or at law, including anaction in mandamus to compel the issuance of bonds by the qualifiedentity.
As added by P.L.43-1985, SEC.27.

IC 5-1.5-8-7
Investment and reinvestment; securities sold to bank
    Sec. 7. Notwithstanding any statute applicable to or constitutingany limitation on the investment or reinvestment of funds by or onbehalf of political subdivisions, a qualified entity selling securitiesto the bank in connection with a program established by the bankmay invest and reinvest funds that constitute, replace, or substitutefor the proceeds of securities sold to the bank under an establishedbank program in any instrument or other investment authorized undera resolution of the bank.
As added by P.L.29-1992, SEC.3.