CHAPTER 16. INDIANA FINANCE AUTHORITY FINANCING OF HEALTH FACILITIES
IC 5-1-16
Chapter 16. Indiana Finance Authority Financing of HealthFacilities
IC 5-1-16-1
Definitions
Sec. 1. As used in this chapter:
"Authority" refers to the Indiana finance authority.
"Bonds" includes bonds, refunding bonds, notes, interimcertificates, bond anticipation notes, and other evidences ofindebtedness of the authority, issued under this chapter.
"Building" or "buildings" or similar words mean any building orpart of a building or addition to a building for health care purposes.The term includes the site for the building (if a site is to be acquired),equipment, heating facilities, sewage disposal facilities, landscaping,walks, drives, parking facilities, and other structures, facilities,appurtenances, materials, and supplies that may be considerednecessary to render a building suitable for use and occupancy forhealth care purposes.
"Cost" includes the following:
(1) The cost and the incidental and related costs of theacquisition, repair, restoration, reconditioning, refinancing, orinstallation of health facility property.
(2) The cost of any property interest in health facility property,including an option to purchase a leasehold interest.
(3) The cost of constructing health facility property, or anaddition to health facility property, acquiring health facilityproperty, or remodeling health facility property.
(4) The cost of architectural, engineering, legal, trustee,underwriting, and related services; the cost of the preparationof plans, specifications, studies, surveys, and estimates of costand of revenue; and all other expenses necessary or incident toplanning, providing, or determining the need for or thefeasibility and practicability of health facility property.
(5) The cost of financing charges, including premiums orprepayment penalties and interest accrued during theconstruction of health facility property or before the acquisitionand installation or refinancing of such health facility propertyfor up to two (2) years after such construction, acquisition, andinstallation or refinancing and startup costs related to healthfacility property for up to two (2) years after such construction,acquisition, and installation or refinancing.
(6) The costs paid or incurred in connection with the financingof health facility property, including out-of-pocket expenses,the cost of any policy of insurance; the cost of printing,engraving, and reproduction services; and the cost of the initialor acceptance fee of any trustee or paying agent.
(7) The costs of the authority, incurred in connection withproviding health facility property, including reasonable sums toreimburse the authority for time spent by its agents or
employees in providing and financing health facility property.
(8) The cost paid or incurred for the administration of anyprogram for the purchase or lease of or the making of loans forhealth facility property, by the authority and any program forthe sale or lease of or making of loans for health facilityproperty to any participating provider.
"County" means any county in the state that owns and operates acounty hospital.
"Health facility property" means any tangible or intangibleproperty or asset owned or used by a participating provider andwhich:
(1) is determined by the authority to be necessary or helpful,directly or indirectly, to provide:
(A) health care;
(B) medical research;
(C) training or teaching of health care personnel;
(D) habilitation, rehabilitation, or therapeutic services; or
(E) any related supporting services;
regardless of whether such property is in existence at the timeof, or is to be provided after the making of, such finding;
(2) is a residential facility for:
(A) individuals with a physical, mental, or emotionaldisability;
(B) individuals with a physical or mental illness; or
(C) the elderly; or
(3) is a licensed child caring institution providing residentialcare described in IC 12-7-2-29(1) or corresponding provisionsof the laws of the state in which the property is located.
"Health facility" means any facility or building that is:
(1) owned or used by a participating provider;
(2) located:
(A) in Indiana; or
(B) outside Indiana, if the participating provider thatoperates the facility or building, or an affiliate of theparticipating provider, also operates a substantial healthfacility or facilities, as determined by the authority, inIndiana; and
(3) utilized, directly or indirectly:
(A) in:
(i) health care;
(ii) habilitation, rehabilitation, or therapeutic services;
(iii) medical research;
(iv) the training or teaching of health care personnel; or
(v) any related supporting services;
(B) to provide a residential facility for:
(i) individuals with a physical, mental, or emotionaldisability;
(ii) individuals with a physical or mental illness; or
(iii) the elderly; or
(C) as a child caring institution and provides residential care
described in IC 12-7-2-29(1) or corresponding provisions ofthe laws of the state in which the facility or building islocated.
"Net revenues" means the revenues of a hospital remaining afterprovision for proper and reasonable expenses of operation, repair,replacement, and maintenance of the hospital.
"Participating provider" means a person, corporation, municipalcorporation, political subdivision, or other entity, public or private,which:
(1) is located in Indiana or outside Indiana;
(2) contracts with the authority for the financing or refinancingof, or the lease or other acquisition of, health facility propertythat is located:
(A) in Indiana; or
(B) outside Indiana, if the financing, refinancing, lease, orother acquisition also includes a substantial component, asdetermined by the authority, for the benefit of a healthfacility or facilities located in Indiana;
(3) is:
(A) licensed under IC 12-25, IC 16-21, IC 16-28, orcorresponding laws of the state in which the property islocated;
(B) a regional blood center;
(C) a community mental health center or community mentalretardation and other developmental disabilities center (asdefined in IC 12-7-2-38 and IC 12-7-2-39 or correspondingprovisions of laws of the state in which the property islocated);
(D) an entity that:
(i) contracts with the division of disability andrehabilitative services or the division of mental health andaddiction to provide the program described inIC 12-11-1.1-1(e) or IC 12-22-2; or
(ii) provides a similar program under the laws of the statein which the entity is located;
(E) a vocational rehabilitation center established underIC 12-12-1-4.1(a)(1) or corresponding provisions of the lawsof the state in which the property is located;
(F) the owner or operator of a facility that is utilized, directlyor indirectly, to provide health care, habilitation,rehabilitation, therapeutic services, medical research, thetraining or teaching of health care personnel, or any relatedsupporting services, or of a residential facility forindividuals with a physical, mental, or emotional disability,individuals with a physical or mental illness, or the elderly;
(G) a licensed child caring institution providing residentialcare described in IC 12-7-2-29(1) or correspondingprovisions of the laws of the state in which the property islocated;
(H) an integrated health care system between or among
providers, a health care purchasing alliance, a health insureror third party administrator that is a participant in anintegrated health care system, a health maintenance orpreferred provider organization, or a foundation thatsupports a health care provider; or
(I) an individual, a business entity, or a governmental entitythat owns an equity or membership interest in any of theorganizations described in clauses (A) through (H); and
(4) in the case of a person, corporation, municipal corporation,political subdivision, or other entity located outside Indiana, isowned or controlled by, under common control with, affiliatedwith, or part of an obligated group that includes an entity thatprovides one (1) or more of the following services or facilitiesin Indiana:
(A) A facility that provides:
(i) health care;
(ii) habilitation, rehabilitation, or therapeutic services;
(iii) medical research;
(iv) training or teaching of health care personnel; or
(v) any related supporting services.
(B) A residential facility for:
(i) individuals with a physical, mental, or emotionaldisability;
(ii) individuals with a physical or mental illness; or
(iii) the elderly.
(C) A child caring institution providing residential caredescribed in IC 12-7-2-29(1).
"Regional blood center" means a nonprofit corporation orcorporation created under 36 U.S.C. 1 that:
(1) is:
(A) accredited by the American Association of Blood Banks;or
(B) registered or licensed by the Food and DrugAdministration of the Department of Health and HumanServices; and
(2) owns and operates a health facility that is primarily engagedin:
(A) drawing, testing, processing, and storing human bloodand providing blood units or components to hospitals; or
(B) harvesting, testing, typing, processing, and storinghuman body tissue and providing this tissue to hospitals.
As added by P.L.45-1983, SEC.1. Amended by P.L.41-1985, SEC.1;P.L.28-1986, SEC.1; P.L.45-1987, SEC.1; P.L.39-1988, SEC.1;P.L.11-1990, SEC.104; P.L.2-1992, SEC.44; P.L.27-1992, SEC.1;P.L.2-1993, SEC.40; P.L.43-1993, SEC.1; P.L.56-1995, SEC.1;P.L.272-1999, SEC.3; P.L.5-2001, SEC.1; P.L.215-2001, SEC.7;P.L.64-2002, SEC.1; P.L.235-2005, SEC.62; P.L.141-2006, SEC.7;P.L.162-2007, SEC.15; P.L.99-2007, SEC.11.
IC 5-1-16-1.1
Applicability of provisions to the authority
Sec. 1.1. This chapter:
(1) applies to the Indiana finance authority only when acting asthe authority for the purposes set forth in this chapter; and
(2) does not apply to the Indiana finance authority when actingunder any other statute for any other purpose.
As added by P.L.235-2005, SEC.63. Amended by P.L.162-2007,SEC.16.
IC 5-1-16-1.5
Appropriation and expenditure of county tax money; leasesbinding upon county
Sec. 1.5. (a) For purposes of this chapter, county commissioneraction or approval for the appropriation and expenditure of countytax money shall presuppose and include approval by the countycouncil.
(b) A lease entered into by the board of county commissionerswith the authority is valid or binding upon the county only if thelease is approved by a majority vote of the county council.
As added by P.L.43-1993, SEC.2.
IC 5-1-16-2
Repealed
(Repealed by P.L.162-2007, SEC.42.)
IC 5-1-16-3
Repealed
(Repealed by P.L.162-2007, SEC.42.)
IC 5-1-16-4
Repealed
(Repealed by P.L.162-2007, SEC.42.)
IC 5-1-16-5
Repealed
(Repealed by P.L.162-2007, SEC.42.)
IC 5-1-16-6
Repealed
(Repealed by P.L.162-2007, SEC.42.)
IC 5-1-16-7
Repealed
(Repealed by P.L.162-2007, SEC.42.)
IC 5-1-16-8
Repealed
(Repealed by P.L.162-2007, SEC.42.)
IC 5-1-16-9
Repealed
(Repealed by P.L.162-2007, SEC.42.)
IC 5-1-16-10
Repealed
(Repealed by P.L.235-2005, SEC.212.)
IC 5-1-16-10.5
Repealed
(Repealed by P.L.162-2007, SEC.42.)
IC 5-1-16-11
Repealed
(Repealed by P.L.162-2007, SEC.42.)
IC 5-1-16-12
Repealed
(Repealed by P.L.162-2007, SEC.42.)
IC 5-1-16-13
Powers of authority
Sec. 13. (a) The authority has all powers necessary to carry outand effectuate its public and corporate purposes, including but notlimited to the following:
(1) To make and execute contracts and all other instrumentsnecessary or convenient for the performance of its duties andthe exercise of its powers and functions under this chapter.
(2) To employ architects, engineers, independent legal counsel,inspectors, accountants, and health care and financial experts,and such other advisors, consultants, and agents as may benecessary in its judgment without the approval of or consent byany other state official, and to fix their compensation.
(3) To procure insurance against any loss in connection with itsproperty and other assets, in such amounts and from suchinsurers as it considers advisable, including the power to paypremiums on any such insurance.
(4) To procure insurance or guarantees from any public orprivate entities, including any department, agency, orinstrumentality of the United States of America, to securepayment:
(A) on a loan, lease, or purchase payment owed by aparticipating provider to the authority; and
(B) of any bonds issued by the authority, including thepower to pay premiums on any such insurance or guarantee.
(5) To procure letters of credit or other credit facilities oragreements from any national or state banking association orother entity authorized to issue a letter of credit or other creditfacilities or agreements to secure the payment of any bondsissued by the authority or to secure the payment of any loan,
lease, or purchase payment owed by a participating provider tothe authority, including the power to pay the cost of obtainingsuch letter of credit or other credit facilities or agreements.
(6) To receive and accept from any source any money, property,or thing of value to be held, used, and applied to carry out thepurposes of this chapter subject to the conditions upon whichthe grants or contributions are made, including gifts or grantsfrom any department, agency, or instrumentality of the UnitedStates of America for any purpose consistent with this chapter.
(7) To provide, or cause to be provided by a participatingprovider, by acquisition, lease, construction, fabrication, repair,restoration, reconditioning, refinancing, or installation, healthfacility property to be located within a health facility.
(8) To lease as lessor any item of health facility property forsuch rentals and upon such terms and conditions as theauthority considers advisable and are not in conflict with thischapter.
(9) To sell by installment or otherwise to sell by option orcontract for sale, and to convey all or any part of any item ofhealth facility property for such price and upon such terms andconditions as the authority considers advisable and as are not inconflict with this chapter.
(10) To make contracts and incur liabilities, borrow money atsuch rates of interest as the authority determines, issue its bondsin accordance with this chapter, and secure any of its bonds orobligations by a mortgage or pledge of all or any of its property,franchises, and income or as otherwise provided in this chapter.
(11) To make secured or unsecured loans for the purpose ofproviding temporary or permanent financing or refinancing forthe cost of any item of health facility property, including theretiring of any outstanding obligations issued by a participatingprovider, and the reimbursement to a participating provider ofadvances, for the cost of any health facility property purchasedin anticipation of procuring such financing or refinancing fromthe authority or other sources, and to charge and collect intereston such loans for such loan payments and upon such terms andconditions as the authority considers advisable and as are not inconflict with this chapter.
(12) To invest and reinvest its funds and to take and holdproperty as security for the investment of such funds asprovided in this chapter.
(13) To purchase, receive, lease (as lessee or lessor), orotherwise acquire, own, hold, improve, use, or otherwise dealin and with, health facility property, or any interest therein,wherever situated.
(14) To sell, convey, mortgage, pledge, assign, lease, exchange,transfer, and otherwise dispose of all or any part of its propertyand assets.
(15) To the extent permitted under its contract with the holdersof bonds of the authority, consent to any modification with
respect to the rate of interest, time, and payment of anyinstallment of principal or interest, or any other term of anycontract, loan, loan note, loan note commitment, contract, lease,or agreement of any kind to which the authority is a party.
(16) To charge to and apportion among participating providersits administrative costs and expenses incurred in the exercise ofthe powers and duties conferred by this chapter.
(17) Except as otherwise provided in a trust agreement or bondresolution securing bonds of the authority, and notwithstandingIC 5-13, to invest:
(A) the authority's money, funds, and accounts;
(B) any money, funds, and accounts in the authority'scustody; and
(C) proceeds of bonds or notes;
in the manner provided by an investment policy established byresolution of the authority.
(18) To collect fees and charges, as the authority determines tobe reasonable, in connection with its loans, leases, sales,advances, insurance, commitments, and servicing.
(19) To cooperate with and exchange services, personnel, andinformation with any federal, state, or local governmentalagency.
(20) To sell, at public or private sale, with or without publicbidding, any loan or other obligation held by the authority.
(21) To assist, coordinate, and participate with other issuers oftax exempt bonds and public officials in other states inconnection with financings or refinancings on behalf ofmultiple state health facilities. Assistance, coordination, andparticipation provided under this subdivision may includeconducting any hearings required by state or federal law inorder for bonds to be issued by public officials in other states ifpart of the proceeds of the bonds will be used by participatingproviders in Indiana. Neither the state of Indiana nor theauthority, nor any officers, agents, or employees of the state orthe authority, are subject to any liability resulting fromassistance to or coordination or participation with other issuersof tax exempt bonds under this subsection. Any assistance,coordination, or participation provided under this subsection isgiven with the understanding that the issuers of tax exemptbonds or borrowers will agree to indemnify and hold harmlessthe state of Indiana and the authority and their officers, agents,and employees from all claims and liability arising from anyaction against the state of Indiana or the authority relating to thebonds.
(22) Subject to the authority's investment policy, to enter intoswap agreements (as defined in IC 8-9.5-9-4) in accordancewith IC 8-9.5-9-5 and IC 8-9.5-9-7.
The omission of a power from the list in this subsection does notimply that the authority lacks that power. The authority may exerciseany power that is not listed in this subsection but is consistent with
the powers listed in this subsection to the extent that the power is notexpressly denied by the Constitution of the State of Indiana or byanother statute.
(b) No part of the revenues or assets of the authority may inure tothe benefit of or be distributable to its members or officers or otherprivate persons. Any net earnings of the authority beyond thatnecessary for retirement of authority indebtedness or to implementthe public purposes of this chapter inure to the benefit of the state.Upon termination or dissolution, all rights and properties of theauthority pass to and are vested in the state, subject to the rights oflienholders and other creditors.
As added by P.L.45-1983, SEC.1. Amended by P.L.28-1986, SEC.4;P.L.5-2001, SEC.2; P.L.235-2005, SEC.72; P.L.162-2007, SEC.17.
IC 5-1-16-13.1
Repealed
(Repealed by P.L.162-2007, SEC.42.)
IC 5-1-16-14
Competitive bidding requirement
Sec. 14. Health facility property financed under this chapter is notsubject to any statutory requirement of competitive bidding or otherrestriction imposed on the procedure for award of contracts or thelease, sale, or other disposition of health facility property with regardto any action taken under authority of this chapter. However, if theprospective lessee or purchaser requests in writing, the authorityshall call for the construction bids in a manner determined by theauthority with the approval of such lessee or purchaser.
As added by P.L.45-1983, SEC.1. Amended by P.L.28-1986, SEC.5.
IC 5-1-16-15
Health facility property; participating providers
Sec. 15. The authority may initiate a program of providing healthfacility property to be operated by participating providers in healthfacilities. In furtherance of this objective, the authority may also:
(1) establish eligibility standards for participating providers,without complying with IC 4-22-2; however, these standardshave the force of law if the standards are adopted after a publichearing for which notice has been published in a newspaperpublished in the city of Indianapolis, at least ten (10) days inadvance of the hearing;
(2) contract with any entity securing the payment of bondsunder section 13(a)(4) and 13(a)(5) of this chapter, authorizingthe entity to approve the participating providers that can financeor refinance health facility property with proceeds from thebond issue secured by that entity;
(3) lease to a participating provider specific items of healthfacility property upon terms and conditions that the authorityconsiders proper, to charge and collect rents therefor, toterminate any such lease upon the failure of the lessee to
comply with any of its obligations under the lease or otherwiseas the lease provides, to include in any such lease provisionsthat the lessee has the options to renew the term of the lease forsuch periods and at such rents as may be determined by theauthority or to purchase any or all of the health facility propertyto which the lease applies;
(4) loan to a participating provider under an installmentpurchase contract or loan agreement money to finance,reimburse, or refinance the cost of specific items of healthfacility property and to take back a secured or unsecuredpromissory note evidencing such a loan and a security interestin the health facility property financed or refinanced with suchloan, upon such terms and conditions as the authority considersproper;
(5) sell or otherwise dispose of any unneeded or obsolete healthfacility property under terms and conditions as determined bythe authority;
(6) maintain, repair, replace, and otherwise improve or cause tobe maintained, repaired, replaced, and otherwise improved anyhealth facility property owned by the authority;
(7) obtain or aid in obtaining property insurance on all healthfacility property owned or financed, or to accept payment if anyhealth facility property is damaged or destroyed; and
(8) enter into any agreement, contract, or other instrument withrespect to any insurance, guarantee, or letter of credit, acceptingpayment in such manner and form as provided therein if aparticipating provider defaults, and to assign any suchinsurance, guarantee, or letter of credit as security for bondsissued by the authority.
As added by P.L.45-1983, SEC.1. Amended by P.L.28-1986, SEC.6;P.L.5-2001, SEC.3; P.L.162-2007, SEC.18.
IC 5-1-16-16
Authority management; agreements
Sec. 16. The authority may employ and may enter into agreementswith, and delegate to any person as it sees fit, the power to managethe routine affairs of the authority, including the originating andprocessing of any applications from participating providers for thelease or purchase from the authority, or financing, reimbursing, orrefinancing by the authority, of health facility property and to servicethe leases, installment purchase contracts, and loan agreementsbetween the authority and the participating providers.
As added by P.L.45-1983, SEC.1. Amended by P.L.28-1986, SEC.7.
IC 5-1-16-17
Security; transactions with participating providers
Sec. 17. Before exercising any of the powers conferred by section15 of this chapter, the authority may:
(1) require that the lease, installment purchase contract, or loanagreement involved be insured by a loan insurer, be guaranteed
by a loan guarantor, or be secured by a letter of credit; and
(2) require any other type of security from the participatingproviders that it considers reasonable and necessary.
As added by P.L.45-1983, SEC.1.
IC 5-1-16-18
Power to issue bonds
Sec. 18. The authority may issue, sell, and deliver its bonds, inaccordance with this chapter, for the purpose of paying for or makingloans to participating providers for the financing, reimbursing, orrefinancing of all or any part of the cost of health facility property,to finance the acquisition of health facility property for lease or saleto participating providers, and any other purposes authorized by thischapter.
As added by P.L.45-1983, SEC.1. Amended by P.L.28-1986, SEC.8.
IC 5-1-16-19
Bonds; requisites
Sec. 19. (a) The bonds must be dated, must bear interest at suchrates (fixed or variable), must mature at such times not exceedingforty (40) years from their date, and may be made redeemable beforematurity at such prices and upon terms and conditions determined bythe authority. The bonds, including any interest coupons to beinitially attached thereto, must be in the forms and denominationsand payable at such places, as the authority determines. The bondsshall be executed by the manual or facsimile signature of thechairman or vice chairman of the authority, and the seal of theauthority, or facsimile seal, shall be affixed or imprinted on thebonds. The seal shall be attested by the manual or facsimile signatureof the public finance director. However, one (1) of the signaturesmust be manual, unless the bonds are authenticated by the manualsignature of an authorized officer of a trustee for the bondholders.Any coupons attached must bear the facsimile signature of thechairman or vice chairman of the authority. If an officer's signatureor a facsimile of whose signature appears on any bonds or coupons,and the officer ceases to be an officer before the delivery of andpayment for such bonds, such signature or such facsimile isnevertheless valid and sufficient for all purposes, the same as if suchofficer had remained in office until such delivery and payment. Thebonds may be issued in coupon or in fully registered form, or both,or may be payable to a specific person, as the authority determines,and provision may be made for the registration of any coupon bondsas to principal alone or as to both principal and interest, for theconversion of coupon bonds into fully registered bonds withoutcoupons, and for the conversion into coupon bonds of any fullyregistered bonds without coupons. The duty of conversion may beimposed upon a trustee in a trust agreement.
(b) The principal of, redemption premium, if any, and interest onsuch bonds shall be payable solely from and may be secured by apledge of all or any part of the proceeds of bonds, revenues derived
from the lease or sale of health facility property or realized from aloan made by the authority to finance or refinance in whole or in parthealth facility property, revenues derived from operating healthfacility property, including insurance proceeds, or any other revenuesprovided by a participating provider.
(c) The authority shall sell the bonds at prices it determines, atpublic or private sale.
(d) The authority may provide for the issuance of bonds of theauthority for the purpose of refunding any bonds of the authority thenoutstanding, including the payment of any redemption premiumthereon and any interest accrued or to accrue to the earliest or anysubsequent date of redemption, purchase or maturity of such bonds,and, if considered advisable by the authority, for the additionalpurpose of paying all or any part of the cost of health facilityproperty.
(e) The proceeds of any bonds issued for the purpose of refundingoutstanding bonds may, in the discretion of the authority, be appliedto the purchase or retirement at maturity or redemption of suchoutstanding bonds either on their earliest or any subsequentredemption date or upon the purchase or at the maturity thereof andmay, pending such application, be placed in escrow to be applied tosuch purchase or retirement at maturity or redemption on such dateas may be determined by the authority. Subject to the provisions ofany trust indenture to the contrary, any such escrowed proceeds,pending such use, may be invested and reinvested in such obligationsas are determined by the authority in order to assure the promptpayment of the principal and interest and redemption premium, ifany, on the outstanding bonds to be so refunded. The interest,income, and profits, if any, earned or realized on any such investmentmay also be applied to the payment of the outstanding bonds to be sorefunded. Only after the terms of the escrow have been fully satisfiedand carried out, any balance of such proceeds and interest, income,and profits, if any, earned or realized on the investments thereof shallbe returned to the authority or the participating providers for use bythem in any lawful manner. All such bonds are subject to this chapterin the same manner and to the same extent as other bonds issuedunder this chapter.
As added by P.L.45-1983, SEC.1. Amended by P.L.28-1986, SEC.9;P.L.1-2009, SEC.12.
IC 5-1-16-20
Bond proceeds; use; disbursement
Sec. 20. The proceeds of the bonds (other than refunding bonds)of each issue shall be used for the payment of all or part of the costof, or for the making of a loan in the amount of all or part of the costof, the health facility property for which such bonds have beenauthorized and, at the option of the authority, for the deposit to areserve fund or reserve funds for the bonds. However, the authoritymay be paid, out of money from the proceeds of the sale and deliveryof its bonds issued in accordance with this chapter, all of the
authority's out-of-pocket expenses and costs in connection with theissuance, sale, and delivery of such bonds, and the costs of obtaininginsurance, guarantees, and letters of credit securing payment of thebonds and the lease and the loan and installment purchase payments,plus an amount equal to the compensation paid to any employees ofthe authority for the time those employees have spent on activitiesrelating to the issuance, sale, and delivery of the bonds. Bondproceeds shall be disbursed in the manner and under the restrictionsdetermined by the authority.
As added by P.L.45-1983, SEC.1. Amended by P.L.28-1986, SEC.10.
IC 5-1-16-21
Trust indenture to secure bonds; operating expenses
Sec. 21. (a) The bonds may be secured by a trust indenture by andbetween the authority and a corporate trustee which may be any bankhaving the power of a trust company or any trust company in Indiana.The trust indenture may contain such provisions for protecting andenforcing the rights and remedies of the holders of the bonds as maybe reasonable and proper and not in violation of law, includingcovenants setting forth the duties of the authority in relation to theexercise of its powers and the custody, investing, safekeeping, andapplication of all money. The authority may provide by the trustindenture for the payment of the proceeds of the bonds and therevenue to the trustee under the trust indenture or other depository,and for the method of disbursement thereof, with such safeguardsand restrictions as the authority may determine. All expensesincurred in carrying out the trust indenture may be treated as a partof the operating expenses of the authority. If the bonds are securedby a trust indenture, the holders of the bonds have no authority toappoint a separate trustee to represent them.
(b) All expenses incurred in carrying out this chapter shall bepayable solely from funds provided under the authority of thischapter and no liability may be incurred by the authority or the statebeyond the extent to which money has been provided under thischapter.
As added by P.L.45-1983, SEC.1.
IC 5-1-16-22
Bond resolutions or related instruments; provisions and additionalsecurity authorized
Sec. 22. Any bond resolution or related trust indenture, indentureof mortgage, or deed of trust may contain provisions, which must bea part of the contract with the holders of the bonds to be authorized,as to:
(1) pledging or assigning the revenues generated by the healthfacility property, pledging or assigning the notes and mortgage,lease, or other security given by the participating providerswhose health facility property has been financed with theproceeds of such bonds or other specified revenues or propertyof the authority; (2) the rentals, fees, interest, and other amounts to be chargedby the authority, the schedule of principal payments, and thesums to be raised in each year thereby, and the use, investment,and disposition of such sums;
(3) setting aside any reserves or sinking funds, and theregulation, investment, and disposition thereof;
(4) limitation on the use of the health facility property;
(5) limitations on the purpose to which or the investments inwhich the proceeds of sale of any issue of bonds then orthereafter may be applied;
(6) limitations on the issuance of additional bonds, terms uponwhich additional bonds may be issued and secured, and theterms upon which additional bonds may rank on a parity with,or be subordinate or superior to, other bonds;
(7) the refunding of outstanding bonds;
(8) the procedure, if any, by which the terms of any contractwith holders of the bonds may be amended or abrogated, theamounts of bonds the holders of which must consent thereto,the manner in which such consent may be given, andrestrictions on the individual rights of action by holders of thebonds;
(9) acts or omissions that constitute a default in the duties of theauthority to holders of its bonds and providing the rights andremedies of such holders in the event of default; and
(10) any other matters relating to the bonds that the authorityconsiders desirable.
Bonds of the authority may also be secured by and payable from apooling of leases or of notes and mortgages or other securityinstruments whereby the authority may assign its rights, as lessor,and pledge rents under two (2) or more leases of health facilityproperty with two (2) or more participating providers, as lessees, orassign its rights as payee or secured party and pledge the revenuesunder two (2) or more notes and loan agreements from two (2) ormore participating providers, upon such terms as may be provided forin bond resolutions or other instruments under which such bonds areissued.
As added by P.L.45-1983, SEC.1. Amended by P.L.28-1986, SEC.11.
IC 5-1-16-23
Payment of bonds
Sec. 23. Every issue of bonds is payable solely out of revenues,assets, or money of the authority as the authority determines, subjectonly to any agreements with the holders of particular bonds pledgingany particular money or revenue. The bonds may be additionallysecured by a pledge of any grant, contribution, or guarantee from thefederal government or any corporation, limited liability company,association, institution, or person or a pledge of any money, income,or revenue of the authority from any source.
As added by P.L.45-1983, SEC.1. Amended by P.L.8-1993, SEC.49.
IC 5-1-16-24
Bonds not indebtedness or obligation of state
Sec. 24. (a) Bonds issued under this chapter do not, and shall stateupon the face of each bond that they do not, represent or constitutea debt of the authority or of the state within the meaning of theprovisions of the Constitution or statutes of Indiana or a pledge of thefaith and credit of the authority or the state or grant to the owners orholders thereof any right to have the authority or the state levy anytaxes or appropriate any funds for the payment of the principalthereof or interest thereon. Such bonds are payable and shall statethat they are payable solely from the funds pledged for their paymentin accordance with the bond resolution or trust agreement securingthe same.
(b) This chapter does not authorize the authority or anydepartment, board, commission, or other agency to create anobligation of the state within the meaning of the Constitution orstatutes of Indiana.
As added by P.L.45-1983, SEC.1.
IC 5-1-16-25
Pledge by authority
Sec. 25. Any pledge made by the authority is valid and bindingfrom the time when the pledge is made. The revenue, money, orproperties so pledged and thereafter received by the authority areimmediately subject to the lien of such pledge without any physicaldelivery thereof or further act, and the lien of any such pledge isvalid and binding as against all parties having claims of any kind intort, contract, or otherwise against the authority, irrespective ofwhether the parties have notice of the lien. Neither the resolution norany other instrument by which a pledge is created need be recorded.
As added by P.L.45-1983, SEC.1.
IC 5-1-16-26
Repurchase of authority bonds
Sec. 26. The authority, subject to such agreements with holders ofthe bonds as then exist, may purchase bonds of the authority out ofany available funds, which shall thereupon be cancelled, at anyreasonable price which, if the bonds are then redeemable, does notexceed the redemption price then applicable plus accrued interest tothe next interest payment date thereon.
As added by P.L.45-1983, SEC.1.
IC 5-1-16-27
Negotiability of bonds
Sec. 27. Regardless of whether the bonds are in the form andcharacter of negotiable instruments, the bonds are negotiableinstruments, subject only to provisions of the bonds relating toregistration.
As added by P.L.45-1983, SEC.1.
IC 5-1-16-28
Personal liability of bond issuers
Sec. 28. Neither the members of the authority nor any otherperson executing the bonds issued under this chapter is subject topersonal liability by reason of the issuance of the bonds.
As added by P.L.45-1983, SEC.1.
IC 5-1-16-29
Establishment of funds and accounts
Sec. 29. The authority may establish funds and accounts necessaryfor its purposes.
As added by P.L.45-1983, SEC.1.
IC 5-1-16-30
Deposit of funds in accounts
Sec. 30. All money of the authority, except as otherwise providedin this chapter, shall be deposited as soon as practical in a separateaccount in banks or trust companies organized under the laws ofIndiana or in national banking associations. The money in theseaccounts shall be paid by checks signed by the public financedirector or other officers or employees of the authority as theauthority authorizes. All deposits of money shall, if required by theauthority, be secured in such a manner as the authority determines tobe prudent, and all banks or trust companies are authorized to givesecurity for the deposits.
As added by P.L.45-1983, SEC.1. Amended by P.L.1-2009, SEC.13.
IC 5-1-16-31
Enforcement of rights and duties concerning bonds
Sec. 31. (a) Any holder of bonds or any coupons appertainingthereto, and the trustee under any trust agreement or resolutionauthorizing the issuance of such bonds, except to the extent the rightsgiven in this chapter may be restricted by such trust agreement orresolution, may, either at law or in equity, by suit, action, mandamus,or other proceeding, protect and enforce any and all rights under thelaws of Indiana, or under such trust agreement or resolution, or underany other contract executed by the authority under this chapter, andmay enforce and compel the performance of all duties required bythis chapter or by such trust agreement or resolution to be performedby the authority or by any officer thereof.
(b) The state does hereby pledge to and agree with the holders ofany bonds issued under this chapter that the state will not limit oralter the rights vested in the authority to fulfill the terms of anyagreements made with the holders of bonds, or in any way impair therights or remedies of the holders until the bonds, together with theinterest thereon, with interest on any unpaid installments of interest,and all costs and expenses in connection with any action orproceeding by or on behalf of the holders, are fully met anddischarged. The authority may include this subsection in anyagreement with the holders of the bonds.As added by P.L.45-1983, SEC.1.
IC 5-1-16-32
Payment of expenses
Sec. 32. All expenses incurred by the authority in carrying out thischapter are payable solely from funds provided under this chapter,except to the extent payable from grants or advances fromparticipating providers or any other entity, which grants or advancesmay be reimbursed from bond proceeds, and this chapter does notauthorize the authority to incur indebtedness or liability on behalf ofor payable by the state or any political subdivision of it.
As added by P.L.45-1983, SEC.1.
IC 5-1-16-33
Public property; tax exemption
Sec. 33. All property acquired or held by the authority under thischapter is declared to be public property used for public andgovernmental purposes, and all property, income therefrom andbonds issued under this chapter, interest payable thereon and incomederived therefrom, are exempt from all taxes, direct or indirect,imposed by the state, any county, any city, or any politicalsubdivision of the state.
As added by P.L.45-1983, SEC.1.
IC 5-1-16-34
Bonds as legal investments
Sec. 34. The bonds issued under this chapter by the authority arelegal investments in which all public officers or public bodies of thisstate, its political subdivisions, all municipalities and municipalsubdivisions, all insurance companies, associations, and otherpersons carrying on insurance business, all banks, bankers, bankingassociations, trust companies, savings associations, including savingsand loan associations, building and loan associations, investmentcompanies, and other persons carrying on a banking business, alladministrators, guardians, executors, trustees, and other fiduciaries,and all other persons who are authorized to invest in bonds or inother obligations of this state, may invest funds, including capital, intheir control or belonging to them. Such bonds are securities whichmay be deposited with and received by all public officers and bodiesof the state or any agency or political subdivision of the state and allmunicipalities and public corporations for any purpose for which thedeposit of bonds or other obligations of the state is authorized bylaw.
As added by P.L.45-1983, SEC.1.
IC 5-1-16-35
Repealed
(Repealed by P.L.162-2007, SEC.42.)
IC 5-1-16-36
Construction of chapter
Sec. 36. Nothing in this chapter may be construed as a restrictionor limitation upon any powers which the authority might otherwisehave under any other law of this state, and this chapter is cumulativeto such powers. This chapter shall be construed to provide acomplete, additional, and alternative method for the doing of thethings authorized, and shall be construed as supplemental to powersconferred by any other laws. The adoption by the authority of bylawsand rules, and the issuance of bonds by the authority under thischapter need not comply with the requirements of any other statelaws applicable to the adoption of bylaws and rules and the issuanceof bonds, notes, and other obligations. No proceedings, notice, orapproval is required for the issuance of any bonds or any instrumentor the security therefor, or for the proper conduct of the authority'sbusiness, affairs, or operations, except as provided in this chapter.
As added by P.L.45-1983, SEC.1.
IC 5-1-16-37
Repealed
(Repealed by P.L.1-2010, SEC.156.)
IC 5-1-16-38
Leases by county with the authority
Sec. 38. (a) A county may lease land and buildings, including thenecessary equipment and appurtenances, from the authority forhospital purposes. No contract of lease on a particular building shallbe entered into for a period of more than forty (40) years. However,a contract of lease is renewable for less than forty (40) years.
(b) A lease entered into by a county may require the funding of areserve fund for the benefit of the authority or the authority's assigns.In order to assure the maintenance of the required reserve amount inany reserve fund, the county council may appropriate for deposit inthe reserve fund the sum certified by the county fiscal officer to thecounty council that is necessary to restore the reserve fund to anamount equal to the required reserve amount. The county fiscalofficer shall annually before December 1 prepare and deliver acertificate to the county council stating the sum required to restorethe reserve fund to the appropriate reserve amount. Nothing in thissubsection creates a debt or liability of the county to make anappropriation.
(c) All amounts received because of money appropriated by thecounty to a reserve fund must be held by the authority under the leaseand applied in accordance with the lease.
As added by P.L.43-1993, SEC.3.
IC 5-1-16-39
Leases before construction, erection, or renovation of buildings
Sec. 39. A county may, in anticipation of the construction,erection, or renovation of a building (including the necessary
equipment and appurtenances), make and enter into a contract oflease with the authority prior to the actual acquisition of a site andthe construction, erection, or renovation of the building. The contractof lease shall not provide for the payment of any lease rental by thelessee until the building is ready for occupancy. However, if abuilding is to be acquired and renovated under this chapter, a countymay, in anticipation of the acquisition and renovation, make andenter into a contract of lease upon terms and conditions that areagreed upon by the county and the authority, including:
(1) terms and conditions upon which the county may continueto operate the building until completion of the renovation; and
(2) the payment of a lease rental by the lessee during the periodof renovation.
As added by P.L.43-1993, SEC.4.
IC 5-1-16-40
Payment of lease rental
Sec. 40. (a) Any lease executed under section 38 or 39 of thischapter may provide for the payment of the lease rental in any one(1) of the following ways as established in the lease:
(1) Entirely from the levy of taxes.
(2) Entirely from the net revenues of the hospital of which theleased building is a part.
(3) In part from the levy of taxes and in part from the netrevenues described in subdivision (2).
(b) If any lease provides for the payment of lease rental in wholeor in part from net revenues of the hospital, the lease may furtherprovide that the county and the board of trustees or board ofmanagers of the hospital set aside and hold as a reserve for suchpurpose excess net revenues over and above the amount required topay lease rental payable from net revenues. The reserve fund may notexceed an amount equal to the amount of lease rental payable fromnet revenues for two (2) years. The reserve fund shall be held andused only for the purpose of paying lease rental payable from netrevenues, if such net revenues at any time are insufficient to paylease rentals. The amount in the reserve fund may be invested in themanner and to the extent provided in the lease. All interest or otherincome from the investment shall become part of the reserve fundunless the reserve fund contains the maximum amount required to bein the reserve fund. The following occur if the reserve fund containsthe maximum amount required to be in the reserve fund:
(1) If any of the lease rental is payable from taxes, the interestor other income shall be transferred to the fund to be used forthe payment of the lease rental provided to be paid from taxes.
(2) If none of the lease rental is payable from taxes, the interestor other income shall become a part of the reserve fund.
As added by P.L.43-1993, SEC.5.
IC 5-1-16-41
Payment of lease rental from cumulative building fund Sec. 41. In addition to the ways specified in section 40 of thischapter for the payment of lease rental, any lease executed under thischapter may provide for the payment of lease rental from acumulative building fund established by the lessee underIC 16-22-5-3 (or IC 16-12.1-4-4 before its repeal on July 1, 1993).Part or all of a cumulative building fund and the tax levied for thatcumulative building fund may be committed and pledged to thepayment of the lease rental. To the extent that the amount committedand pledged is insufficient to pay the lease rental, the lease shallprovide that any remaining lease rental shall be paid entirely from thenet revenues of the hospital of which the leased building is a part. Solong as the lease remains in effect:
(1) any amount of cumulative building fund so committed andpledged may not be expended by lessee for any other purpose;and
(2) the tax levy committed and pledged for the cumulativebuilding fund may not be reduced or rescinded by the countycouncil.
Notwithstanding any other provision of this chapter, if a leaseprovides for payment of lease rental under this section, no approvalof the county council is required for the lease, the terms andconditions of the lease, or the sale of the land by the county to theauthority under this chapter.
As added by P.L.43-1993, SEC.6.
IC 5-1-16-42
Notice of public hearing; notice of execution of lease; action tocontest validity of lease; taxpayer objections to lease
Sec. 42. (a) When the authority, the board of trustees or board ofmanagers of the hospital, the board of commissioners of the county,and a majority of the county council have agreed upon the terms andconditions of any lease proposed to be entered into under section 38or 39 of this chapter, and before the final execution of the lease, thecounty auditor shall give notice by publication of a public hearing tobe held in the county by the board of commissioners. The hearingshall take place on a day not earlier than ten (10) days after thepublication of the notice. The notice of the hearing shall be publishedone (1) time in a newspaper of general circulation printed in theEnglish language and published in the county. The notice shall do thefollowing:
(1) Name the day, place, and hour of the hearing.
(2) Set forth a brief summary of the principal terms of the leaseagreed upon, including the character and location of theproperty to be leased, the lease rental to be paid, and thenumber of years the contract is to be in effect.
(3) State a location where the proposed lease, drawings, plans,specifications, and estimates may be examined.
The proposed lease and the drawings, plans, specifications, andestimates of construction cost for the building shall be open toinspection by the public during the ten (10) day period and at the
hearing. All interested persons shall have a right to be heard at thehearing on the necessity for the execution of the lease and whetherthe lease rental under the lease is fair and reasonable. The hearingmay be adjourned to a later date with the place of the hearing fixedprior to adjournment. Following the hearing, the board ofcommissioners may either authorize the execution of the lease asoriginally agreed upon or may make modifications that are agreedupon by the authority, the board of trustees or board of managers ofthe hospital, and the county council. The authorization shall be by anorder that is entered in the official records of the board ofcommissioners. The lease contract shall be executed on behalf of thecounty by the board of commissioners.
(b) If the execution of the lease as originally agreed upon or asmodified by agreement is authorized, notice of the signing of thelease shall be given on behalf of the county by publication one (1)time in a newspaper of general circulation printed in the Englishlanguage and published in the county. Except as provided insubsection (d), ten (10) or more taxpayers in the county whose taxrate will be affected by the proposed lease and who may be of theopinion that no necessity exists for the execution of the lease or thatthe lease rental under the lease is not fair and reasonable may file apetition in the office of the county auditor within thirty (30) daysafter publication of notice of the execution of the lease that sets forththe taxpayers' objections and facts supporting those objections. Uponthe filing of a petition, the county auditor shall immediately certifya copy of the petition together with such other data as may benecessary in order to present the questions involved to thedepartment of local government finance. Upon receipt of the certifiedpetition and information, the department of local government financeshall fix a time and place in the affected county for the hearing of thematter that is not less than five (5) or more than fifteen (15) daysafter receipt. Notice of the hearing shall be given by the departmentof local government finance to the board of county commiss