CHAPTER 14. MISCELLANEOUS PROVISIONS
IC 5-1-14
Chapter 14. Miscellaneous Provisions
IC 5-1-14-1
Bonds, notes, or warrants not subject to maximum interest ratelimitations
Sec. 1. (a) Any bonds, notes, or warrants, whether payable fromproperty taxes, revenues, or any other source, are not subject to themaximum interest rate limitations contained in any law enactedbefore December 31, 1982, if they are issued by or in the name ofany entity named in IC 5-1-1-1.
(b) After July 1, 1979, any bond, coupon, certificate ofindebtedness, or installment payment payable by a city, town, orproperty holder for public improvements under the Barrett Law is notsubject to any maximum interest rate limitation. This subsection doesnot apply to interest rates or penalties on delinquencies providedunder the Barrett Law.
(c) This section does not limit an interest rate review conductedby the department of local government finance under IC 6-1.1-20-7.
As added by Acts 1980, P.L.8, SEC.25. Amended by P.L.44-1983,SEC.6; P.L.90-2002, SEC.12.
IC 5-1-14-1.2
Issuer defined
Sec. 1.2. As used in this chapter, "issuer" means any issuer ofobligations that is referred to in IC 5-1-1-1(b).
As added by P.L.37-1988, SEC.2.
IC 5-1-14-1.3
Definitions
Sec. 1.3. The following definitions apply throughout this chapter:
(1) "Local issuing body" has the meaning set forth inIC 5-1-5-1.
(2) "Special benefit taxes" has the meaning set forth inIC 5-1-5-1.
(3) "Tax increment revenues" has the meaning set forth inIC 5-1-5-1.
As added by P.L.146-2008, SEC.28.
IC 5-1-14-1.5
Obligations defined
Sec. 1.5. As used in this chapter, "obligations" has the meaningset forth in IC 5-1-3-1(b).
As added by P.L.37-1988, SEC.3.
IC 5-1-14-2
Provisions for payment of bonds, notes, or warrants beforematurity date
Sec. 2. Any bonds, notes, or warrants, whether payable fromproperty taxes, revenues, or any other source, issued by an entity
enumerated in section 1(a) of this chapter may provide that thebonds, notes, or warrants may be payable before maturity fromavailable funds and with such premiums as are set forth in the bonds,notes, or warrants. In addition, the bonds, notes, or warrants mayprovide that they may be registered as to principal or interest, orboth, at the option of the holder, and upon such terms and conditionsas are set forth in the bonds, notes, or warrants.
As added by Acts 1980, P.L.8, SEC.25.
IC 5-1-14-3
Maintenance of federal tax exclusion from gross income forinterest on bonds
Sec. 3. Notwithstanding any other law, any issuer may take anyreasonable and necessary action to establish or maintain theexclusion from gross income for interest on obligations of the issuerunder federal law. These actions may include, without limitation:
(1) filing information reports with the federal government;
(2) rebating money derived from bond proceeds or moneytreated as bond proceeds under federal law, or earnings thereon,to the federal government;
(3) restricting the yield on money or earnings described insubdivision (2) to the yield on bonds of the issuer;
(4) investing money or earnings described in subdivision (2) inobligations of issuers that bear interest that is excludable fromgross income under federal law;
(5) issuing obligations in an amount sufficient to serve thepublic purpose of the financing without considering earningsthereon;
(6) qualifying obligations under any volume cap or electing anycarryforward of unused volume cap;
(7) designating, through its legislative body or any boardresponsible for issuing obligations as long as the obligations areexecuted by the executive of the issuer, obligations to qualifyfor any exemption from the loss of any deduction for interestincurred by any financial institution to carry tax exemptobligations or for any exemption from federal arbitrage rebaterequirements; and
(8) complying with limitations imposed by federal law on theissuance of tax exempt bonds under IC 36-7-14, IC 36-7-14.5,IC 36-7-15.1, or IC 36-7-15.3, including, without limitation:
(A) designation of redevelopment project areas by alegislative body (as defined in IC 36-1-2-9) havingjurisdiction over the area;
(B) considering any factors required by federal law indetermining whether an area meets the criteria fordesignation as a redevelopment project area; and
(C) limiting the use of property in a redevelopment projectarea.
As added by P.L.27-1986, SEC.1. Amended by P.L.37-1988, SEC.4;P.L.2-1989, SEC.4; P.L.185-2005, SEC.1.
IC 5-1-14-4
Pledge made by issuer binding; lien
Sec. 4. (a) Notwithstanding any other law, a pledge of revenuesor other money, or property made by any issuer is binding from thetime the pledge is made. Revenues or other money, or propertypledged and thereafter received by the issuer are immediately subjectto the lien of the pledge without any further act, and the lien of apledge is binding against all parties having claims of any kind in tort,contract, or otherwise against the issuer, regardless of whether theparties have notice of any lien. No resolution, ordinance, indenture,or any other instrument by which a pledge is created needs to be filedor recorded except in the records of the issuer.
(b) Notwithstanding any other law, an issuer may pledge anyrevenues or other money or pledge or mortgage property to pay debtservice on or secure any obligations or any lease rental or contractualpayments, if:
(1) the issuer has the necessary statutory authority to issueobligations, pay lease rentals, or make contractual payments forany project or purpose for which the pledge or mortgage ismade;
(2) the revenues, money, or property is legally available, underfederal, state, and local laws, to pay or secure debt service,lease rentals, or contractual payments; and
(3) the pledge or mortgage does not purport to create anobligation in violation of any statutory or constitutionallimitation to which the issuer is subject.
As added by P.L.27-1986, SEC.2. Amended by P.L.37-1988, SEC.5.
IC 5-1-14-5
Bond anticipation notes; issuance
Sec. 5. Notwithstanding any other law, any city, town, county,school corporation, or regional district organized under IC 13-26 orIC 13-3-2 (before its repeal) that has complied with all statutoryrequirements for the issuance of its bonds, other than IC 5-1-11 orany public sale statute, may, in lieu of issuing bonds at that time andwithout the need for complying with any other law applicable to theissuance of bonds, notes, or other evidences of indebtedness, issueits notes in anticipation of the issuance of bonds to a financialinstitution. However, if the amount of the notes is at least one milliondollars ($1,000,000), the notes may be issued to any purchaser. Thebond anticipation notes may be issued on terms set forth in aresolution or ordinance authorizing their issuance and in any amountequal to or less than the amount of bonds authorized to be issued.The city, town, county, school corporation, or district may renew orextend the bond anticipation notes from time to time on terms agreedto with the financial institution or other purchaser. The amount of theaccrued interest on the date of renewal or extension of the bondanticipation notes may be paid or added to the principal amount ofthe bond anticipation notes being renewed or extended as long as theaggregate principal amount of bond anticipation notes outstanding at
any time does not exceed the maximum principal amount permittedby this section. The bond anticipation notes, including any renewalsor extensions, 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 city, town, county, schoolcorporation, or district and the financial institution or otherpurchaser. The bond anticipation notes must be finally paid, andinterest on the bond anticipation notes may be finally paid, with theproceeds of the bonds issued by the city, town, county, schoolcorporation, or district. In connection with the issuance of bonds,part or all of the proceeds of which will be used to retire the bondanticipation notes, it is not necessary for the city, town, county,school corporation, or district to repeat the procedures for theissuance of bonds, as the procedures followed before the issuance ofthe bond anticipation notes are for all purposes sufficient to authorizethe issuance of the bonds.
As added by P.L.44-1987, SEC.4. Amended by P.L.2-1989, SEC.5;P.L.35-1990, SEC.2; P.L.1-1996, SEC.34.
IC 5-1-14-6
Use of proceeds for costs of issuance of obligation, funding debtservices reserves, or payment of interest; reimbursements
Sec. 6. (a) Notwithstanding any other law, an issuer may useproceeds of its obligations to pay the reasonable cost of issuance ofthe obligations or to fund reasonably required debt service reservesto secure the payment of the obligations.
(b) Notwithstanding any other law, an issuer may use proceeds ofthe issuer's obligations to pay interest on the obligations for:
(1) a period not to exceed two (2) years from the date ofissuance of the obligations; or
(2) any longer period that is permitted by any other statute.
(c) Notwithstanding any other law, an issuer may reimburse itselffor preliminary costs incurred in financing any project or purposefrom proceeds of the obligations when issued.
As added by P.L.37-1988, SEC.6. Amended by P.L.35-1990, SEC.3;P.L.24-1995, SEC.22.
IC 5-1-14-7
Application of section; stadium; lease rental tax
Sec. 7. (a) This section applies to:
(1) each county having a population of more than one hundredseventy thousand (170,000) but less than one hundred eightythousand (180,000); and
(2) each second class city located in such a county.
(b) As used in this section, "stadium" means a structure used forathletic, recreational, cultural, and community events.
(c) Notwithstanding any other law, a stadium constitutes a:
(1) government building under IC 36-9-13;
(2) structure under IC 36-1-10;
(3) park purpose under IC 36-10-1; (4) park improvement under IC 36-10-4; and
(5) redevelopment project or purpose under IC 36-7-14.
(d) Notwithstanding any other law, a legislative body of a citymay levy a tax in the park district established under IC 36-10-4 topay lease rentals to a lessor of a stadium under IC 36-1-10 orIC 36-9-13.
As added by P.L.38-1988, SEC.1. Amended by P.L.12-1992, SEC.14;P.L.170-2002, SEC.12.
IC 5-1-14-8
Money withheld by auditor as not creating debt for constitutionalpurposes
Sec. 8. If a statute provides that amounts due under a loan to apolitical subdivision (as defined in IC 36-1-2) or a local publicimprovement bond bank shall or may be withheld by the auditor ofstate from other money payable to the political subdivision or bondbank upon failure to make repayment of the loan, the requirement orpermission to withhold amounts due under the loan does not createa debt of the political subdivision for purposes of the Constitution ofthe State of Indiana.
As added by P.L.2-1989, SEC.6.
IC 5-1-14-9
Rights of owners of obligations not to be impaired
Sec. 9. (a) The general assembly covenants that it will not adopt,amend, or repeal a statute in a way that impairs the rights andremedies of the owners of obligations, until the obligations, intereston the obligations, interest on an unpaid installment of interest, andall costs and expenses in connection with an action or proceedingsby or on behalf of the owners are fully paid and discharged.
(b) An agency (as defined in IC 4-22-2-3) may not adopt, amend,or repeal a rule under IC 4-22-2 in a way that impairs the rights andremedies of the owners of obligations, until the obligations, intereston the obligations, interest on an unpaid installment of interest, andall costs and expenses in connection with an action or proceedingsby or on behalf of the owners are fully paid and discharged.
As added by P.L.2-1989, SEC.7.
IC 5-1-14-10
Maximum term or repayment period of obligations; continuationof payments
Sec. 10. (a) If an issuer has issued obligations under a statute thatestablishes a maximum term or repayment period for the obligations,notwithstanding that statute, the issuer may continue to makepayments of principal, interest, or both, on the obligations after theexpiration of the term or period if principal or interest owed toowners of the obligations remains unpaid.
(b) This section does not authorize the use of revenues or fundsto make payments of principal and interest other than those revenuesor funds that were pledged for the payments before the expiration of
the term or period.
(c) Except as otherwise provided by this section, IC 16-22-8-43,IC 36-7-12-27, IC 36-7-14-25.1, or IC 36-9-13-30 (but only withrespect to any bonds issued under IC 36-9-13-30 that are secured bya lease entered into by a political subdivision organized and existingunder IC 16-22-8), the maximum term or repayment period forobligations issued after June 30, 2008, that are wholly or partiallypayable from ad valorem property taxes, special benefit taxes onproperty, or tax increment revenues derived from property taxes maynot exceed:
(1) the maximum applicable period under federal law, forobligations that are issued to evidence loans made or guaranteedby the federal government or a federal agency;
(2) twenty-five (25) years, for obligations that are wholly orpartially payable from tax increment revenues derived fromproperty taxes; or
(3) twenty (20) years, for obligations that are not described insubdivision (1), or (2), and are wholly or partially payable fromad valorem property taxes or special benefit taxes on property.
As added by P.L.2-1989, SEC.8. Amended by P.L.146-2008, SEC.29;P.L.182-2009(ss), SEC.63.
IC 5-1-14-11
Payment of fees and charges authorized
Sec. 11. If an issuer is authorized by statute to issue obligationsand to make payments of principal and interest to owners of thoseobligations from any source, the issuer is authorized to pay fees andcharges associated with the issuance of the obligations from thatsource, including the payment of fees and charges associated withobtaining and enforcing credit enhancement for the obligations.
As added by P.L.2-1989, SEC.9.
IC 5-1-14-12
Refunding obligations
Sec. 12. Notwithstanding any other law, if an agency, anauthority, a board, a department, or a commission of a unit (asdefined in IC 36-1-2) is authorized to issue obligations in the nameof the unit for any purpose for which any other agency, authority,board, department, or commission of the unit may issue itsobligations, the agency, the authority, the board, the department, orthe commission may issue obligations to refund obligations issued inthe name of the unit by the other agency, authority, board,department, or commission of the unit.
As added by P.L.2-1989, SEC.10.
IC 5-1-14-12.5
Purchase and issuance of obligations on terms reasonable to issuer
Sec. 12.5. Notwithstanding any other law, an issuer may purchaseany obligations on terms the issuer finds reasonable and may issueits obligations to effectuate that purpose on terms that the issuer finds
reasonable.
As added by P.L.224-2003, SEC.265.
IC 5-1-14-13
Contesting validity of obligations
Sec. 13. The following provisions apply when an issuer negotiatesa sale of obligations and a statute does not specify a time withinwhich to contest the validity of the obligations or the sale of theobligations:
(1) No action to contest the validity of the obligations may bebrought after the fifteenth day following the adoption of theresolution authorizing the sale of the obligations.
(2) No action to contest the validity of the sale of theobligations may be brought after the fifth day following thesale.
As added by P.L.2-1989, SEC.11.
IC 5-1-14-14
Loans, expenditures, and issuance of bonds for economicdevelopment
Sec. 14. (a) Notwithstanding any other law, a municipality maysell the municipality's interest in any notes payable to themunicipality at a negotiated sale.
(b) A county or municipality may establish a revolving fund fromgrants, the revenue received by the county or municipality underIC 6-3.5-7, the proceeds of the sale of notes, or the proceeds of bondsissued under this section and IC 36-9-32. The county or municipalitymay loan the money in the revolving fund to any borrower if thecounty or municipal fiscal body finds that the loan will be used bythe borrower for one (1) or more of the following economicdevelopment purposes:
(1) Promoting significant opportunities for the gainfulemployment of the county's or municipality's residents.
(2) Attracting a major new business enterprise to the county ormunicipality.
(3) Retaining or expanding a significant business enterprise inthe county or municipality.
(c) Activities that may be undertaken by the borrower in carryingout an economic development purpose include expenditures for anyof the following:
(1) Acquisition of land.
(2) Acquisition of property interests.
(3) Site improvements.
(4) Infrastructure improvements.
(5) Buildings.
(6) Structures.
(7) Rehabilitation, renovation, or enlargement of buildings orstructures.
(8) Machinery.
(9) Equipment. (10) Furnishings.
(d) Local governmental entities may borrow under subsection (b)if the local governmental entity's jurisdiction includes the geographicarea within the boundaries of the county or municipality thatestablished the revolving fund. Notwithstanding any other law, thefollowing provisions apply to the borrowing:
(1) The county or municipality that established the revolvingfund and the local governmental entity borrower may eachauthorize the loan from the revolving fund and the issuance ofnotes evidencing the loan by resolution. In each case, theresolution shall be adopted by the body with control over fiscalmatters.
(2) A resolution adopted under subdivision (1) must approve:
(A) the term of the loan;
(B) the interest rate;
(C) the form of the note or notes;
(D) the medium of payment;
(E) the place and manner of payment;
(F) the manner of execution of the note or notes;
(G) the terms of redemption;
(H) the funds or sources of funds from which the note ornotes are payable, which may be any funds and sources offunds available to the borrower; and
(I) any other provisions not inconsistent with this section.
(3) The notes and the authorization, issuance, sale, and deliveryof the notes are not subject to any general statute concerningobligations issued by the local governmental entity borrower.This section contains full and complete authority for the makingof the loan, the authorization, issuance, sale, and delivery of thenotes, and the repayment of the loan by the borrower, and nolaw, procedure, proceedings, publications, notices, consents,approvals, orders, or acts by any officer, department, agency, orinstrument of the state or of any political subdivision is requiredto make the loan, issue the notes, or repay the loan except asprescribed in this section.
(4) The notes issued by a local governmental entity borrowerare exempt from taxation for all purposes and are exempt fromany security registration requirements provided for in Indianastatutes.
(5) Notes issued by a local governmental entity borrower underthis section are obligations for all purposes of this chapter.
(e) A municipality may issue bonds under IC 36-9-32-7(b)through IC 36-9-32-7(j) for the economic development purposeslisted in subsection (c) and may repay the indebtedness solely fromrevenues derived from the repayment of any notes, including notesevidencing loans made under subsection (b).
(f) To the extent a revolving fund under subsection (b) is fundedfrom:
(1) revenues received by the county under IC 6-3.5-7; or
(2) repayments of principal and interest on loans from the
revolving fund that were funded with revenues described insubdivision (1);
money in the revolving fund may at any time be transferred in wholeor in part to the unit's economic development income tax fund, asdetermined by ordinance of the unit's fiscal body.
(g) The general assembly finds that counties and municipalities inIndiana have a need to foster economic development and industrialand commercial growth. The general assembly finds that it isnecessary and proper to provide an alternative method formunicipalities to foster the following:
(1) Economic development.
(2) Industrial and commercial growth.
(3) Employment opportunities.
(4) Diversification of industry and commerce.
It is declared that the fostering of economic development under thissection for the benefit of the general public, including industrial andcommercial enterprises, is a public purpose.
As added by P.L.35-1990, SEC.4. Amended by P.L.27-1995, SEC.5.
IC 5-1-14-15
Bonds and obligations to fund pension benefits
Sec. 15. (a) Before July 1, 2008, a county or municipality mayissue bonds, notes, or other obligations for the purpose of providingfunds to pay pension benefits under IC 36-8-6, IC 36-8-7, orIC 36-8-7.5.
(b) Notwithstanding any other law:
(1) bonds, notes, or other obligations issued for the purposedescribed in this section may have a final maturity date up to,but not exceeding, forty (40) years from the date of originalissuance;
(2) the amount of bonds, notes, or other obligations that may beissued for the purpose described in this section may not exceedtwo percent (2%) of the true tax value of property locatedwithin the county or municipality; and
(3) the proceeds of bonds, notes, or other obligations issued forthe purpose described in this section may be deposited to theissuing county's or municipality's separate account described inIC 5-10.3-11-6.
(c) This section is supplemental to all other laws but does notrelieve a county or municipality from complying with otherprocedural requirements for the issuance of bonds, notes, or otherobligations.
As added by P.L.234-2007, SEC.37. Amended by P.L.146-2008,SEC.30.
IC 5-1-14-16
Payment of principal and interest on obligations in nearly equalpayment amounts and at regular designated intervals; exceptions
Sec. 16. (a) This section applies to obligations that are:
(1) issued after June 30, 2008, by a local issuing body; and (2) payable from ad valorem property taxes, special benefittaxes on property, or tax increment revenues derived fromproperty taxes;
including obligations that are issued under a statute that permits thebonds to be issued without complying with any other law orotherwise expressly exempts the bonds from the requirements of thissection.
(b) An agreement for the issuance of obligations must provide forthe payment of principal and interest on the obligations in nearlyequal payment amounts and at regular designated intervals over themaximum term of the obligations except to the extent that:
(1) interest for a particular repayment period has been paid fromthe proceeds of the obligations under section 6 of this chapter;or
(2) the local issuing body authorizes a different paymentschedule to:
(A) maintain substantially equal payments, in the aggregate,in any period in which the local issuing body pays theinterest and principal on outstanding obligations;
(B) provide for the payment of principal on the obligationsin amounts and at intervals that will produce an aggregateamount of principal payments greater than or equal to theaggregate amount that would otherwise be paid as of thesame date;
(C) provide for level principal payments over the term of theobligations, in order to reduce total interest costs;
(D) with respect to obligations wholly or partially payablefrom tax increment revenues derived from property taxes,provide for the payment of principal and interest in varyingamounts over the term of the obligations as necessary due tothe variation in the amount of tax increment revenuesavailable for those payments; or
(E) provide for a repayment schedule that will result in thesame or a lower amount of interest being paid on obligationsthat would be issued using nearly equal payment amounts.
As added by P.L.146-2008, SEC.31. Amended by P.L.182-2009(ss),SEC.64.