CHAPTER 2.2. MUNICIPAL ELECTRIC UTILITY PROGRAMS
IC 8-1-2.2
Chapter 2.2. Municipal Electric Utility Programs
IC 8-1-2.2-1
Findings and purpose
Sec. 1. Municipalities owning facilities for the distribution ofelectric power and energy are required by law to provide, and servea public purpose by providing, customers with an adequate, areliable, and an economical supply of electric power and energy.Individually, such municipalities or joint agencies are not financiallycapable of providing the planning, financing, locating, and buildingof needed new facilities for generation and transmission or operatingor managing these facilities. Therefore, the general assembly findsit necessary and proper to provide a method for certain of thosemunicipalities to jointly finance, develop, own, manage, and operate,either by themselves or with public utilities, electric generation andtransmission facilities appropriate to the present and projectedelectric energy needs of such municipalities and to the changes in theelectric utility industry affecting these municipalities or jointagencies.
As added by Acts 1980, P.L.68, SEC.1. Amended by P.L.54-1992,SEC.1; P.L.81-1997, SEC.1.
IC 8-1-2.2-2
Definitions
Sec. 2. (a) The definitions in this section apply throughout thischapter.
(b) "Bonds" means electric utility revenue bonds, notes, and otherevidences of indebtedness of a municipality or a joint agency issuedunder the provisions of this chapter.
(c) "Cost" or "cost of a project" means but may not be limited tothe cost of acquisition, construction, reconstruction, improvement,enlargement, betterment, extension, decommissioning, or disposal ofany project or part thereof, including:
(1) the cost of studies, plans, specifications, surveys, andestimates of costs and revenues relating thereto;
(2) the cost of land, land rights, rights-of-way and easements,water rights, fees, permits, approvals, licenses, certificates,franchises, and the preparation of applications thereof;
(3) administrative, legal, engineering, and inspection expenses;
(4) financing fees, expenses, and costs;
(5) working capital;
(6) initial fuel costs;
(7) interest on the bonds during the period of construction andfor such reasonable period thereafter as may be determined bythe issuing municipality or joint agency;
(8) establishment of reserves for the payment of debt service,for renewals and replacements, for working capital, foroperating expenses, and for any other purposes deemedreasonable and proper; and (9) all other expenditures of the issuing municipality or jointagency incidental, necessary, or convenient to the acquisition,construction, reconstruction, improvement, enlargement,betterment, extension, decommissioning, or disposal of anyproject and the placing of the same in operation.
(d) "Governing body" means the legislative body of a city or townor commissioners of a joint agency.
(e) "Joint agency" means an agency created by two (2) or moremunicipalities pursuant to section 8 of this chapter.
(f) "Municipality" means a city or town in the state or any board,agency, or commission thereof owning and operating on January 1,1980, an electric utility which furnishes retail electric service to thepublic.
(g) "Project" means any plant, works, system, or facilities, andother real and personal property of any nature whatsoever necessaryor convenient in the generation, transmission, transformation,purchase, sale, exchange, or interchange of electric power and energyor steam, or the development, production, manufacture, procurement,handling, storage, fabrication, enrichment, processing, orreprocessing of fuel of any kind or any facility or rights with respectto the supply of water, by any means whatsoever or any interesttherein or any rights to the use, output, or capacity thereof. Atransmission contract entered into under section 9(a)(14) of thischapter is not a project.
(h) "Public utility" means any corporation, company, limitedliability company, partnership, or other form of legal entity,individual, association of individuals, or public agency organizedunder the laws of Indiana or another state of the United Statesauthorized to own, operate, or control any plant or equipment for thegeneration, transmission, or distribution of electric power and energyand to sell electric power and energy to:
(1) the public;
(2) public or municipally owned utilities (as defined inIC 8-1-2); or
(3) cooperatives.
(i) "State" means the state of Indiana.
As added by Acts 1980, P.L.68, SEC.1. Amended by P.L.23-1988,SEC.29; P.L.82-1988, SEC.1; P.L.8-1989, SEC.39; P.L.179-1991,SEC.12; P.L.1-1992, SEC.29; P.L.54-1992, SEC.2; P.L.1-1993,SEC.48; P.L.81-1997, SEC.2.
IC 8-1-2.2-3
Authorization to cooperate
Sec. 3. Authorization to Cooperate. (a) In addition andsupplemental to the powers otherwise conferred on municipalities bylaw, and in order to accomplish the purposes of this chapter, amunicipality may plan, finance, develop, construct, reconstruct,acquire, improve, enlarge, own, operate and maintain an undividedinterest as a tenant in common in a project jointly with one (1) ormore municipalities, joint agencies or public utilities, and may plan
and enter into contracts in this connection with them, not inconsistentwith the provisions of this chapter.
(b) Prior to acquiring any undivided interest, the governing bodyshall determine the present and future needs of the municipality forpower and energy based upon engineering studies and reports, andmay not acquire an undivided interest as a tenant in common in aproject in excess of that amount of capacity and the energy requiredto provide for its projected needs for power and energy for suchreasonable period of time as shall be determined by the governingbody and approved by the commission in a proceeding pursuant tosection 19 of this chapter.
(c) The future power requirements of a municipality shall beevaluated by the governing body in accordance with the following:
(1) the economies and efficiencies to be achieved inconstructing large scale facilities for the generation andtransmission of electric power and energy;
(2) the municipality's needs for reserve and peaking capacityand obligations reasonably related to its needs for power andenergy under pooling and reserve sharing agreements to whichit is or may become a party;
(3) the estimated useful life of the project; and
(4) the estimated time for planning, development, acquisition orconstruction of the project and the time required in advance toobtain, acquire or construct additional power supply.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-4
Joint ownership of project
Sec. 4. (a) Each municipality, joint agency, or public utility shallown an undivided interest in any project in proportion to the amountof the money furnished or the value of property or otherconsideration supplied by it for the planning, development,acquisition, or construction of the project and shall be entitled to apercentage share of the project net output and capacity equal to theundivided interest. This section does not preclude a joint owner of aproject from agreeing to take and pay for the project net output in apercentage share that differs from its undivided interest.
(b) Each municipality, joint agency, and public utilityparticipating in a project shall be severally liable for its own acts andmay not be held, jointly or severally liable for the acts, omissions, orobligations of others. However, nothing shall preclude eachmunicipality, joint agency and public utility participating in a projectfrom being severally liable for acts performed by any projectmanager, construction agent, or operating agent for such project.Except as otherwise provided in this chapter, no money or propertyor other consideration supplied by any municipality, joint agency, orpublic utility may be credited or otherwise applied to the account ofany other municipality, joint agency, or public utility, nor shall theundivided share of any municipality, joint agency, or public utility ina project be charged directly or indirectly with any debt or obligation
of any other municipality, joint agency, or public utility, or besubject to any lien as a result thereof. The acquisition of a projectmay include, but is not limited to, the purchase or lease of an existingand completed project or the purchase of a project under constructionor the purchase of a project to be constructed. A municipality or jointagency participating in the joint planning, financing, construction,reconstruction, acquisition, improvement, enlargement, ownership,operation, or maintenance of any project under this chapter mayfurnish money derived solely from the proceeds of bonds or from theownership and operation of its electric system, or both, and provideproperty, both real and personal, services, and other considerations.
(c) Any contract entered into by municipalities under this chapterwith respect to joint ownership in a project shall contain terms,conditions, and provisions, not inconsistent with the provisions ofthis section. Any contract shall be ratified by resolution of thegoverning body of each municipality and recorded in its minutes.Any contract shall include the following:
(1) The purpose or purposes of the contract.
(2) The duration of the contract.
(3) The manner of appointing or employing personnel necessaryin connection with the project.
(4) The method of financing the project including theapportionment of costs and revenues.
(5) Provisions specifying the ownership interests of the partiesin property used or useful in connection with the project, andthe procedures for the disposition of such property when thecontract expires, is terminated, or when the project, for anyreason, is abandoned, decommissioned, or dismantled.
(6) Provisions relating to alienation and prohibiting partition ofa municipality's undivided interest in a project, whichprovisions shall not be subject to any provision of lawrestricting convenants against alienation or partition.
(7) Provisions for the construction of a project, which mayinclude the determination that a municipality, joint agency, orpublic utility may construct the project as agent for all theparties.
(8) Provisions for the operation and maintenance of a project,which may include the determination that a municipality, jointagency, or public utility may operate and maintain the projectas agent for all the parties.
(9) Provisions for the creation of a committee of representativesof the municipalities, joint agencies and public utilities jointlyparticipating with such powers of supervision of theconstruction and operation of the project as the contract mayprovide, which are not inconsistent with the provisions of thischapter.
(10) Provisions that if one (1) or more of the municipalities,joint agencies, or public utilities default in the performance ordischarge of its obligations with respect to the project, the otherparty or parties may assume, pro rata, or otherwise, the
obligations of the defaulting party or parties and may succeedto the rights and interests of the defaulting party or parties asmay be agreed upon in the contract.
(11) Methods for amending the contract.
(12) Methods for terminating the contract.
(13) Any other necessary or proper matter.
(d) For the purpose of paying its respective share of the cost of aproject or projects, a municipality or joint agency may issue its bondsas provided in this chapter, and, notwithstanding the provisions ofany other law to the contrary, may pledge to the payment of theprincipal, premium, if any, and interest on such bonds, the revenues,or any portion of revenues, derived or to be derived from theownership and operation of its system or facilities for the generation,transmission, or distribution of electric power or energy or its interestin any joint project or projects, or a combination of such revenues.All bonds issued under the provisions of this chapter shall beauthorized and issued by the governing body. Upon the request of theissuing municipality or joint agency the commission shall approve atone (1) time sufficient bonds to be issued to finance the issuer's shareof the cost of a project even though such bonds are to be issued inseries from time to time and even though the exact amount of suchcosts have not been finally determined and such approval may be ofan indeterminate amount.
(e) Municipalities and joint agencies may jointly or severally own,operate and maintain projects with any public utility. Anymunicipality or joint agency shall have for such purposes all powersconferred upon them by the provisions of this chapter including thepower to issue revenue bonds pursuant to the provisions of thischapter to finance its share of the cost of any such project. Thedefinitions and all other terms and provisions of this chapter shall beconstrued so as to include such undivided ownership interest in orderto fully effectuate the power and authority conferred by the foregoingprovisions of this section.
As added by Acts 1980, P.L.68, SEC.1. Amended by P.L.82-1988,SEC.2.
IC 8-1-2.2-5
Sale of capacity or output by a municipality
Sec. 5. Sale of Capacity or Output by a Municipality. Whenevera municipality has capacity or output derived from its ownershipshare of a project or otherwise in excess of its current needs or whichcannot be economically utilized immediately, it may sell or exchangethe excess capacity or output, by agreement, to any municipalityowning electric distribution facilities in this state, to any jointagency, or to any public utility. Sales of excess capacity or output ofa project to public utilities shall not be made in such amounts, forsuch periods of time, and under such conditions as will cause theinterest on bonds issued to finance the cost of a project to becometaxable by the federal government.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-6
Licenses and approvals
Sec. 6. Licenses and Approvals. Municipalities and joint agenciesproposing to jointly plan, finance, develop, and operate a project areauthorized to jointly or separately apply to any agency of the state orfederal government for licenses, permits, certificates, or approvals.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-7
Authority to contract for energy exchange
Sec. 7. Authority to Contract for Energy Exchange. Municipalitiesparticipating in a project or projects are hereby authorized to enterinto contracts for the exchange, interchange, wheeling, pooling, andtransmission of electric power and energy produced by the project orprojects with any municipality, joint agency, or public utility.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-8
Joint agency
Sec. 8. (a) The governing bodies of two (2) or more municipalitiesmay, by resolution or ordinance, determine that it is in their bestinterests to create a joint agency, for the purpose of undertaking theplanning, financing, ownership, and operation of a project or projectsto supply electric power and energy for their present or future needs.Any joint agency created under this chapter shall be a body corporateand politic and a political subdivision of the state, and in exercisingits powers under this chapter, it shall be deemed to be exercising apart of the sovereign powers of the state. The activities of the jointagency in carrying out the purposes of this chapter shall constitutestate action.
(b) In determining whether or not the creation of a joint agency isin their best interests, the governing bodies shall consider thefollowing:
(1) Whether cost reduction, efficiencies, or other advantagesmay be realized by creating a joint agency.
(2) Whether better financial market acceptance may result if ajoint agency is responsible for issuing all of the bonds for theproject or projects in a timely and orderly manner and withuniform credit ratings as opposed to multiple municipalitiesmaking separate issues of bonds.
If each governing body determines that it is in the best interests ofthe municipality to create a joint agency, each governing body shalladopt a mutually acceptable resolution or ordinance so finding(which need not prescribe in detail the basis for the determination),which shall set forth the names of the municipalities proposed to bemembers of the joint agency and shall authorize any two (2) or moreof such municipalities to enter into a contract for the creation of thejoint agency. After the execution of the contract, each municipalityshall cause notice of the execution of the contract to be given to thepresiding officer of the governing body of the municipality. The
governing body shall thereupon appoint in writing one (1)commissioner of the joint agency.
(c) The appointed commissioners shall convene and issue astatement containing:
(1) a brief description of the resolution creating the jointagency;
(2) the name of the agency;
(3) the participating municipalities; and
(4) the names and addresses of the appointed commissioners.
The commissioners shall file copies of the statement with thecommission, the secretary of state, and with the recorder of eachcounty in which the member municipal utilities provide service.
(d) The joint agency shall consist of a board of commissioners.The governing body of each municipality shall appoint one (1)commissioner who may be an officer or employee of the municipalityor a member or employee of the board described in IC 8-1.5-3-3(a).The appointment of a commissioner shall be made by resolution orordinance. Each commissioner shall have not less than one (1) voteand may have such number of additional votes as a majority of themembers of the joint agency shall determine. Each commissionershall serve at the pleasure of the governing body by which he wasappointed. Each appointed commissioner before entering upon hisduties shall take and subscribe to an oath before a person authorizedby law to administer oaths to execute the duties of his officefaithfully and impartially, and a record of the oath shall be filed withthe governing body of the appointing municipality and entered in itsminutes.
(e) The board of commissioners of the joint agency shall annuallyelect, from among its membership, a chairman and a vice chairman.It shall also annually elect another person or persons, who may becommissioners, as treasurer and secretary. It may also annually elect,if desired, one (1) or more assistant secretaries. The office oftreasurer may be held by the secretary or an assistant secretary. Theboard of commissioners may also appoint additional officers. Thesecretary or assistant secretary of the joint agency shall keep a recordof its proceedings and the secretary shall be the custodian of allrecords, books, documents, and papers filed with the joint agency,the minute book or journal of the joint agency and its official seal.Either the secretary or an assistant secretary of the joint agency maycause copies to be made of all minutes and other records anddocuments of the joint agency and may give certificates under theofficial seal of the joint agency to the effect that such copies are truecopies, and all persons dealing with the joint agency may rely uponsuch certificates.
(f) A majority of the commissioners of a joint agency constitutea quorum. A vacancy in the board of commissioners of the jointagency shall not impair the right of a quorum to exercise all therights and perform all the duties of the joint agency. Any action takenby the joint agency under the provisions of this chapter may beauthorized by resolution at any regular or special meeting, and each
resolution takes effect immediately and need not be published orposted. A contract that is approved by a resolution of the board ofcommissioners may provide that an action may be taken under adelegation provision in the contract if the action taken is consistentwith prudent utility practice. A majority of the votes which theconvened commissioners are entitled to cast shall be sufficient totake any action or to pass any resolution, so long as the convenedcommissioners are entitled to cast a majority of the total number ofvotes held by the full board.
(g) Except as provided in this subsection, no commissioner of ajoint agency may receive from the joint agency any compensation forthe performance of his duties under this chapter. However, eachcommissioner may be paid his necessary expenses incurred whileengaged in the performance of his duties. In addition, a municipalitymay pay the commissioner it appoints up to fifteen dollars ($15) perday for each day or fraction of a day the commissioner is engaged inthe performance of duties under this chapter, but only if thecommissioner is not a person holding a lucrative office.
(h) The board of commissioners of the joint agency may create anexecutive committee of the board of commissioners. The board mayprovide for the composition of the executive committee. Theexecutive committee shall have and shall exercise such of the powersand authority of the board of commissioners during the intervalsbetween the board's meetings as shall be prescribed in the bylaws ofthe joint agency. The terms of office of the members of the executivecommittee and the method of filling vacancies therein shall be fixedby the bylaws of the joint agency.
(i) Additional municipalities may join a joint agency upon suchterms and conditions as shall be provided in the contract for thecreation of the joint agency.
As added by Acts 1980, P.L.68, SEC.1. Amended by P.L.90-1985,SEC.1; P.L.82-1988, SEC.3; P.L.81-1997, SEC.3.
IC 8-1-2.2-9
General powers of joint agencies
Sec. 9. (a) Each joint agency shall have all of the rights andpowers necessary or convenient to carry out the purposes andprovisions of this chapter, including but not limited to the following:
(1) To adopt bylaws for the regulation of the affairs and theconduct of its business, and to prescribe rules, regulations, andpolicies in connection with the performance of its functions andduties.
(2) To adopt an official seal and alter the same at pleasure.
(3) To maintain an office at such place or places as it maydetermine.
(4) To sue and be sued in its own name and to plead and beimpleaded.
(5) To receive, administer, and comply with the conditions andrequirements respecting any gift, grant, or donation of anyproperty or money. (6) To acquire by purchase, lease, gift, or otherwise, or toobtain options for the acquisition of, any property, real orpersonal, improved or unimproved, including an interest in landless than the fee thereof.
(7) To sell, lease, exchange, transfer, or otherwise dispose of,or to grant options for any such purposes with respect to, anyreal or personal property or interest therein.
(8) To pledge or assign any money, rents, charges, or otherrevenues and proceeds derived by the joint agency from thesales of bonds or property and insurance or condemnationproceeds and any contracts or other rights of the joint agency.
(9) To issue bonds of the joint agency for the purpose of payingall or any part of the costs of any of the projects or purposesauthorized by this chapter.
(10) To study, plan, finance, construct, reconstruct, acquire,improve, enlarge, better, own, operate, and maintainindividually or jointly with one (1) or more other joint agencies,municipalities or public utilities one (1) or more projects and topay all or any part of the costs thereof from the proceeds ofbonds of the joint agency or from any other funds available tothe joint agency.
(11) To generate, produce, transmit, deliver, exchange,purchase, or sell for resale only, electric power or energy orsteam, and transmission and related services and to enter intocontracts for any or all such purposes.
(12) To fix, charge and collect rents, rates, fees and charges forelectric power or energy and other services, facilities, andcommodities sold, furnished or supplied by it.
(13) To negotiate and enter into contracts with each of itsmember municipalities whereby each municipality maypurchase power and energy and related services from the jointagency derived from any project or projects or withoutdesignation as to source and pursuant to which contracts eachmunicipality shall agree to make payments from the revenues ofits electric system adequate:
(A) to pay when due (whether at maturity, upon acceleration,or by sinking fund requirements) the principal, premium, ifany, and interest on all bonds issued by the joint agency tofinance any service provided to such member municipality,and to establish reserves therefor; and
(B) to pay the necessary expenses of the joint agency(including, without limitation, all amounts required to becollected pursuant to the trust agreement or resolutionproviding for the issuance of bonds) and to establish reservestherefor.
(14) To make and execute contracts and other instrumentsnecessary or convenient for the operation, maintenance, andmanagement of a regional transmission system, includingtransmission facilities owned by a municipality or a jointagency. Such a contract may not be for a term that is more than
fifty (50) years. Such a contract may not make the state, apolitical subdivision, or a municipality a shareholder in a publicutility. Such a contract may delegate responsibilities if thedelegation and action taken are consistent with prudent utilitypractice.
(15) To make and execute contracts and other instrumentsnecessary or convenient in the exercise of the powers andfunctions of the joint agency under this chapter, includingcontracts with persons, firms, corporations, limited liabilitycompanies, and others.
(16) To employ engineers, attorneys, financial advisors, andsuch other consultants, agents, and employees as may berequired in the judgment of the joint agency and to fix and paytheir compensation from funds available to the joint agencytherefor.
(17) To do all acts and things necessary, convenient, ordesirable to carry out the purposes of, and to exercise thepowers granted to, the joint agency herein.
(b) No joint agency may finance a project or projects, in whole orin part, without first obtaining the approval of the commission asprovided in section 19 of this chapter.
(c) No joint agency may construct any transmission line withoutfirst obtaining the approval of the commission as provided in section19 of this chapter.
(d) A determination by the joint agency approved by thecommission shall be conclusive unless a party to the proceedingaggrieved by the determination of the commission shall file notice ofappeal pursuant to IC 8-1-3.
As added by Acts 1980, P.L.68, SEC.1. Amended by P.L.82-1988,SEC.4; P.L.8-1993, SEC.116; P.L.81-1997, SEC.4.
IC 8-1-2.2-10
Contracts with municipality
Sec. 10. Contracts with Municipality. (a) Any municipality whichis a member of a joint agency may contract to purchase power andenergy and related services from the joint agency derived from anyproject or projects or without designation as to source and pursuantto which contracts such municipality shall agree to make paymentsto the joint agency from the revenues of its electric system adequate:
(1) to pay when due (whether at maturity, upon acceleration, orby sinking fund requirements) the principal, premium, if any,and interest on all bonds issued by the joint agency to financeany service provided to such member municipality, and toestablish reserves therefor; and
(2) to pay the necessary expenses of the joint agency (including,without limitation, all amounts required to be collected pursuantto the trust agreement or resolution providing for the issuanceof bonds) and to establish reserves therefor.
Since the creation of a joint agency is an alternative method wherebya municipality may obtain the benefits of a joint project or projects,
any contract may provide: (A) that the contracting municipality shallbe obligated to make the payments required by the contract whetheror not a project is completed, operable or operating andnotwithstanding the suspension, interruption, interference, reductionor curtailment of the output of a project or the power and energycontracted for; and (B) that the payments under the contract may notbe subject to any reduction whether by offset or otherwise, and maynot be conditioned upon the performance or nonperformance of thejoint agency or any other member of the joint agency under thecontract or any other instrument. Any contract may also provide thatif one (1) or more of the municipalities should default in theperformance or discharge of its obligations under its contract, theother contracting municipalities shall assume, pro rata, or otherwise,the obligations of the defaulting municipality or municipalities andmay succeed to the rights and interests of the defaulting municipalityor municipalities as may be agreed upon in the contract. Any suchcontract may also provide for requirements, purchases or exclusivedealing arrangements if the joint agency determines that suchprovisions are necessary to obtain financing on favorable terms.
(b) Notwithstanding the provisions of any other law to thecontrary, any contract with respect to the sale or purchase of powerand energy, transmission and related services, from a joint agencymay extend for a period not exceeding fifty (50) years from the dateservice is estimated to be first rendered under the contract; and theexecution and effectiveness of the contract may not be subject to anyauthorizations or approvals by the state or any agency, commissionor instrumentality or political subdivision thereof except asspecifically required and provided in this chapter, nor shall it besubject to any publication requirements.
(c) Payments by a municipality under any contract with a jointagency shall be payable solely from the revenues derived from theownership and operation of the electric system of that municipalityand may be treated as an expense of the operation and maintenancethereof if the contract so provides, and any obligation under thatcontract may not constitute a legal or equitable pledge, charge, lien,or encumbrance upon any property of the municipality or upon anyof its income, receipts, or revenues, except the revenues of its electricsystem, and neither the faith and credit nor the taxing power of themunicipality are, or may be, pledged for the payment of anyobligation under any such contract. A municipality shall be obligatedto fix, charge and collect rents, rates, fees and charges for electricpower and energy and other services, facilities and commodities,sold, furnished or supplied through its electric system in an amountsufficient to provide revenues adequate to meet its obligations underany such contract and to pay any and all other amounts payable fromor constituting a charge and lien upon such revenues. In anyproceeding before the commission for the approval of rates set by amunicipality subject to its jurisdiction, the commission shall makespecific findings of the revenue requirements referred to in the priorsentence and shall provide rates sufficient for such requirements. (d) Any member of a joint agency may furnish the joint agencywith money derived solely from the ownership and operation of itselectric system or facilities and provide the joint agency withpersonnel, equipment and property, both real and personal. Anymunicipality may also provide any services to a joint agency.
(e) Any member of a joint agency may contract for, advance orcontribute funds derived solely from the ownership and operation ofits electric system or facilities to a joint agency as may be agreedupon by the joint agency and the member, and the joint agency shallrepay such advances or contributions from proceeds of bonds, orfrom any other funds of the joint agency, together with interestthereon as may be agreed upon by the member and the joint agency.
(f) In the exercise of the powers enumerated in this chapter,including without limitation, the execution of contracts as providedin this section, a municipality and a joint agency shall be deemed tobe exercising a part of the sovereign powers of the state and shall beexempt from any and all laws, rules and regulations prohibiting,limiting or conditioning anticompetitive conduct.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-11
Issuance of bonds
Sec. 11. Issuance of Bonds. (a) Each municipality or joint agencyis hereby authorized to issue at one (1) time, or from time to time, itsbonds for the purpose of paying all or any part of the cost of any ofthe purposes authorized by this chapter including, without limitation,the funding or refunding of the principal, interest or other obligationon any bonds issued by the municipality or joint agency whether ornot such bonds to be funded or refunded have or have not becomedue, the establishment or increase of reserves to secure or to paysuch bonds, the provision of working capital and the payment of allother costs or expenses incident to and necessary or convenient tocarry out the purposes and powers authorized by this chapter. Theprincipal of, premium, if any, and the interest on these bonds shall bepayable solely from the revenues and other available funds of theissuer pledged or specified for their payment in accordance with thischapter. The bonds of each issue shall bear interest at a rate or ratesdetermined by the issuer and shall not be subject to any other law ofthis state limiting the same. The bonds of each issue shall be datedand shall mature in amounts and at a time or times, not exceedingfifty (50) years from their respective date or dates, as may bedetermined by the governing body of the issuer. The bonds of eachissue may be made redeemable before maturity at a price or prices,and under terms and conditions, as may be fixed by the governingbody of the issuer prior to issuance of the bonds. The governing bodyof the issuer shall determine the form and manner of execution of thebonds, including any interest coupons to be attached, and shall fixthe denomination or denominations of the bonds and the place orplaces of payment of principal and interest, which may be at anybank or trust company within or without the state, provided that at
least one (1) place of payment is within the state. In case any officerwhose signature, or a facsimile of whose signature, appears on anybonds or coupons shall cease to hold that office before the deliveryof his bond, that signature or facsimile shall nevertheless be validand sufficient for all purposes as if he had remained in office untildelivery. The governing body of the issuer may also provide for theauthentication of the bonds by a trustee or fiscal agent. The bondsmay be issued in coupon or in fully registered form, or both, as thegoverning body of the issuer may determine, and provisions may bemade for the registration of any coupon bonds as to principal aloneand also as to both principal and interest, and for the reconversioninto coupon bonds of any bonds registered as to both principal andinterest, and for the interchange of registered and coupon bonds. Thebonds of each issue, issued by a joint agency, shall be sold either bypublic or negotiated sale at such price as may be determined by thejoint agency.
(b) The proceeds of the bonds of each issue shall be used solelyfor the purposes for which such bonds have been issued, and shall bedisbursed in such manner and under such restrictions, if any, as thegoverning body of the issuer may provide in the resolutionauthorizing the issuance of those bonds or in any trust agreementsecuring the bonds. The municipality or joint agency may issueinterim receipts or temporary bonds, with or without coupons,exchangeable for definitive bonds when those bonds have beenexecuted and are available for delivery. The municipality or jointagency may also provide for replacement of any bonds which havebecome mutilated, destroyed, or lost.
(c) Except as provided in section 19 of this chapter, bonds may beissued under the provisions of this chapter without obtaining theconsent of the state or of any political subdivision, or of any agency,commission or instrumentality of either of them, and without anyother approvals, proceedings or the happening of any conditions orthings other than those approvals, proceedings, conditions or thingsspecifically required by this chapter, and provisions of the resolutionauthorizing the issuance of the bonds or the trust agreement securingthem.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-12
Trust agreement or resolution on bondholders' rights
Sec. 12. Trust Agreement, or Resolution, on Rights ofBondholders. In the discretion of the governing body of the issuer,any bonds issued under the provisions of this chapter may be securedby a trust agreement by and between the issuer and a corporatetrustee, which may be any trust company or bank having the powersof a trust company within or without the state. That trust agreement,or the resolution providing for the issuance of bonds, may containprovisions for protecting and enforcing the rights and remedies of thebondholders and of the trustee as may be reasonable and proper andnot in violation of law, and may restrict the individual right of action
by bondholders. The trust agreement or the resolution providing forthe issuance of bonds may contain covenants including, but notlimited to, the following:
(1) the pledge of all or any part of the revenues derived or to bederived from the project or projects to be financed by the bondsor from the electric system or facilities of a municipality orjoint agency, or in the case of a joint agency from the revenuesreceived from the municipalities;
(2) the rents, rates, fees and charges to be established,maintained and collected, and the use and disposal of revenues,gifts, grants and funds received or to be received by themunicipality or joint agency;
(3) the setting aside of reserves and the investment, regulationand disposition of reserves;
(4) the custody, collection, securing, investment, and paymentof any moneys held for the payment of bonds;
(5) limitations or restrictions on the purposes to which theproceeds of sale of bonds then or thereafter to be issued may beapplied;
(6) limitations or restrictions on the issuance of additionalbonds; the terms upon which additional bonds may be issuedand secured; or the refunding of outstanding or other bonds;
(7) the procedure, if any, by which the terms of any contractwith bondholders may be amended, the percentage of bonds thebondholders of which must consent to an amendment, and themanner in which consent may be given;
(8) events of default and the rights and liabilities arising upondefault, the terms and conditions upon which bonds issuedunder this chapter shall become or may be declared due beforematurity, and the terms and conditions upon which thedeclaration and its consequences may be waived;
(9) the preparation and maintenance of a budget;
(10) the retention or employment of consulting engineers,independent auditors, and other technical consultants;
(11) limitations on or the prohibition of free service to anyperson, firm, limited liability company, or corporation, publicor private;
(12) the acquisition and disposal of property, provided that noproject or part thereof may be mortgaged by such trustagreement or resolution;
(13) provisions for insurance and for accounting reports and fortheir inspection and audit; and
(14) the continuing operation and maintenance of the project.
As added by Acts 1980, P.L.68, SEC.1. Amended by P.L.8-1993,SEC.117.
IC 8-1-2.2-13
Revenues
Sec. 13. Revenues. (a) A municipality or joint agency may fix,charge and collect rents, rates, fees and charges for electric power
and energy and other services, facilities and commodities sold,furnished or supplied through the facilities of its electric system orits interests in any project. For so long as any bonds of a municipalityor joint agency issued under this chapter are outstanding and unpaid,the rents, fees and charges shall be so fixed as to provide revenuessufficient to pay (1) all costs of and charges and expenses inconnection with the proper operation and maintenance of themunicipality's or joint agency's electric system, (2) its interest in anyproject, (3) all necessary repairs, replacements or renewals thereof,(4) when due (whether at maturity, upon acceleration, or by sinkingfund requirements), the principal, premium, if any, and interest on allbonds payable from said revenues, (5) to create and maintainreserves as may be required by any resolution or trust agreementauthorizing and securing bonds, (6) when due (whether at maturity,upon acceleration, or by sinking fund requirements), the principal,premium, if any, and interest on all general obligation bondsheretofore or hereafter issued to finance additions, and improvementsto its electric system, (7) any and all amounts which the municipalitymay be obligated to pay from these revenues by law or contract, and(8) any additional amounts which must be realized in order to meetthe requirements of any rate covenant imposed by any resolution ortrust agreement authorizing and securing bonds.
(b) Any pledge made by a municipality or joint agency pursuantto this chapter shall be valid and binding from the date the pledge ismade. The revenues, securities, and other moneys so pledged andthen held or thereafter received by the municipality or joint agencyor any fiduciary shall immediately be subject to the lien of the pledgewithout any physical delivery thereof or further act, and the lien ofthe pledge shall be valid and binding as against all parties havingclaims of any kind in tort, contract, or otherwise against themunicipality or joint agency without regard to whether such partieshave notice thereof. The resolution or trust agreement or anyfinancing statement, continuation statement or other instrument bywhich a pledge is created need not be filed or recorded in anymanner.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-14
Trust funds
Sec. 14. Trust Funds. Notwithstanding any other provisions of lawto the contrary, all moneys received pursuant to the authority of thischapter, whether as proceeds from the sale of bonds or as revenues,shall be considered trust funds to be held and applied solely asprovided in this chapter. The resolution authorizing the bonds of anyissue, or the trust agreement securing such bonds, may provide thatany of those moneys may be temporarily invested and reinvestedpending the disbursements of those moneys in securities and otherinvestments as shall be provided in the resolution or trust agreement,and shall also provide that any officer with whom, or any bank ortrust company with which, such moneys shall be deposited shall act
as trustee of those moneys and shall hold and apply them as directed,subject to such regulation as this chapter and the resolution or trustagreement may provide.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-15
Remedies
Sec. 15. Remedies. Any holder of bonds issued under theprovisions of this chapter or any of the bond coupons, and the trusteeunder any trust agreements, except to the extent that his rights arerestricted by the trust agreement or the resolution authorizing theissuance of the bonds, may, (a) either at law or in equity, by suit,action, or other proceeding, protect and enforce any and all rightsunder the laws of the state or, to the extent permitted by law, underthe trust agreement or resolution authorizing the issuance of thebonds or under any agreement or other contract executed by themunicipality or joint agency pursuant to this chapter, and (b) mayenforce and compel the performance of all duties required by thischapter or by the trust agreement or resolution to be performed byany municipality or joint agency or by any officer of anymunicipality or joint agency, including the fixing, charging, andcollecting of rents, rates, fees, and charges.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-16
Bond eligibility for investment
Sec. 16. Bond Eligibility for Investment. Bonds issued by amunicipality or joint agency under the provisions of this chapter arehereby made securities in which all public officers and agencies ofthe state, all insurance companies, banking associations, investmentcompanies, executors, administrators, trustees and other fiduciariesmay properly and legally invest funds, including capital in theircontrol or belonging to them. These bonds are hereby made securitieswhich may properly and legally be deposited with and received byany officer or agency of the state for any purpose for which thedeposit of bonds or obligations of the state is now or may hereafterbe authorized by law.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-17
Agreement of state with bondholders
Sec. 17. Agreement of the State. The state hereby covenants andagrees with the holders of any bonds that so long as any bonds of amunicipality or joint agency issued under this chapter areoutstanding and unpaid, the state will not limit or alter the rightsvested in such municipality or joint agency to acquire, construct,reconstruct, improve, enlarge, extend, own, operate and maintain itselectric system or any project or interest in any project, or toestablish, maintain, revise, charge, and collect the rents, rates, feesand charges referred to in this chapter and to fulfill the terms of any
agreements made with the holders of the bonds or in any way impairthe rights and remedies of the bondholders, until the bonds, togetherwith interest thereon, interest on any unpaid installment of interest,and all costs and expenses in connection with any action orproceedings by or on behalf of the bondholders, are fully paid, metand discharged.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-18
Limited liability on bonds
Sec. 18. Limited Liability. (a) The bonds issued under theauthority of this chapter by a municipality shall not be generalobligations of the municipality issuing them. The principal of,premium, if any, and interest on the bonds shall not be payable fromthe general funds of the municipality, nor shall they constitute a legalor equitable pledge, charge, lien, or encumbrance upon any of itsproperty or upon any of its income, receipts, or revenues, except thefunds which are pledged under the resolution authorizing the bondsor the trust agreement securing the bonds. Neither the faith and creditnor the taxing power of a municipality or of the state are, or may be,pledged for the payment of the principal of, premium, if any, orinterest on the bonds, and no holder of the bonds shall have the rightto compel the exercise of the taxing power by the state or amunicipality or the forfeiture of any of its property in connectionwith any default. Every bond shall recite in substance that theprincipal of, premium, if any, and interest on the bond is payablesolely from the revenues and other funds pledged to its payment andthat the municipality is not obligated to pay the principal, premium,if any, or interest except from such revenues and other funds.
(b) The bonds issued under the authority of this chapter by a jointagency shall constitute obligations of the joint agency issuing themand neither the state nor any political subdivision thereof, other thanthe joint agency, shall be obligated to pay the principal of, premium,if any, or interest on the bonds and neither the faith and credit nor thetaxing power of the state or any such political subdivision thereof orof any such municipality shall be pledged to the payment of theprincipal of, premium, if any, or interest on the bonds.
(c) Payments made under a transmission contract under section9(a)(14) of this chapter must be paid solely from revenues of thejoint agency entering into the contract. The obligation to make thesepayments does not constitute an indebtedness, or lend the credit ofthe state, a political subdivision, or a municipality to a public utility.
As added by Acts 1980, P.L.68, SEC.1. Amended by P.L.81-1997,SEC.5.
IC 8-1-2.2-19
Approval of commission
Sec. 19. (a) Prior to the acquisition or the commencement ofconstruction of any project to be financed by the issuance of bondsunder this chapter, the municipality or municipalities or joint agency
shall file a verified petition with the commission for approval of theproject, for approval of participation of the municipality ormunicipalities or joint agency in the project, and for approval of anybonds to be issued under this chapter. If the commission shalldetermine:
(1) that the participation of the municipality or municipalitiesor joint agency in the project is economically and technicallyfeasible;
(2) that the project will be integrated with existing or plannedtransmission line facilities in the state in a manner that willavoid economic and physical duplication of existing or plannedtransmission line facilities;
(3) that the municipality or municipalities or joint agency ownor have access to the transmission facilities to transmit suchpower and energy from the project to the municipality ormunicipalities or joint agency;
(4) that for a project involving a coal-consuming facility, thefacility utilizes Indiana coal or is justified, because of economicconsiderations or governmental requirements, in utilizingnon-Indiana coal;
(5) that for a project involving the acquisition or participationin the ownership of an electric generating facility locatedoutside Indiana, the municipality, municipalities, or jointagency has been unable to acquire or participate in theownership of a comparable generating facility in Indiana at acomparable cost and unable to purchase sufficient amounts ofelectricity in Indiana at a comparable cost giving dueconsideration to all factors, including but not limited to thelength and terms of available purchases and the expected usefullife of the facility;
(6) that for a project involving the acquisition or participationin the ownership of an electric generating facility locatedoutside Indiana, acquisition of or participation in the ownershipof the facility provides the municipality, municipalities, or jointagency with greater economic benefits than either:
(A) the acquisition or participation in the ownership of acomparable generating facility in Indiana available forownership; or
(B) the purchase of sufficient amounts of electricity inIndiana at a comparable cost giving due consideration to allfactors, including but not limited to the length and terms ofavailable purchases and the expected useful life of thefacility; and
(7) that the determinations of the governing body or bodies withrespect to the items listed in section 3(c) or 8(b) of this chapterhave been or should be approved;
then the commission shall issue an order approving the project andthe participation of the municipality or municipalities or joint agencyin the project and the issuance of bonds by the municipality ormunicipalities or by the joint agency. For the purpose of enabling it
to determine whether it should issue such an order, the commissionshall make such inquiry or investigation, hold such hearings, andexamine such witnesses, books, papers, documents, or contracts asit may deem of importance in enabling it to reach a determination.The determinations required by this subsection are in addition to therequirements of IC 8-1-8.5-4 and IC 8-1-8.5-5.
(b) A joint agency is not a public utility (as defined in IC 8-1-2).However, with respect to proceedings initiated by a joint agencyunder this section, the commission is given jurisdiction to proceed inthe same manner and with like power as is provided by IC 8-1-2 inthe case of public utilities (as defined in IC 8-1-2).
As added by Acts 1980, P.L.68, SEC.1. Amended by P.L.82-1988,SEC.5; P.L.54-1992, SEC.3; P.L.81-1997, SEC.6.
IC 8-1-2.2-20
Acquisition and construction contracts
Sec. 20. Acquisition and Construction Contracts. A municipalityor joint agency may contract for the planning, acquisition,construction, reconstruction, operation, maintenance, repair,extension, and improvement of generation and transmission facilitieswithin or without its corporate limits or those of its members, or maycontract with other public or private entities to perform thesefunctions, without advertising for bids or securing performance andpayment bonds, except to the extent that its governing bodydetermines that these actions are desirable in furtherance of thepurposes of this chapter. Except as otherwise provided by thissection, no contract shall be invalid or unenforceable by reason ofnonperformance of the conditions required by any other law relatingto public contracts.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-21
Tax exempt status
Sec. 21. Tax Exempt Status. Bonds, their transfer and the incometherefrom (including any profit made on the sale thereof), shall at alltimes be free from taxation by the state or any political subdivisionor any agency of either thereof, excepting inheritance or gift taxes.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-22
Payments in lieu of taxes
Sec. 22. Payments in Lieu of Taxes. That part of a project ownedby a municipality or municipalities or joint agency shall be exemptfrom property taxes. However, each municipality participating in aproject or joint agency owning all or any part of a project shall, inlieu of property taxes, pay to any governmental unit authorized tolevy property taxes the amount which would be assessed as taxes onreal and personal property of a project if such project were otherwisesubject to valuation and assessment. Such payments in lieu of taxesshall be due and shall bear interest if unpaid, as in the cases of taxes
on other property. Payments in lieu of taxes made under this sectionshall be treated in the same manner as taxes for purposes of allprocedural and substantive provisions of law.
Except as expressly provided in this section with respect to jointlyowned projects, no other property of a municipality used or useful inthe generation, transmission and distribution of electric power andenergy shall be subject to payments in lieu of taxes.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-23
Personnel
Sec. 23. Personnel. Personnel employed or appointed by amunicipality or joint agency to work on a project shall have the sameauthority, rights, privileges and immunities which officers, agentsand employees of municipalities enjoy, when they are acting withinthe scope of their authority or in the course of their employment.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-24
Dissolution of joint agencies
Sec. 24. Dissolution of Joint Agencies. Whenever the board ofcommissioners of a joint agency and the governing bodies of itsmember municipalities by resolution or ordinance determine that thepurposes for which the joint agency was formed have beensubstantially fulfilled and that all bonds issued and all otherobligations incurred by the joint agency have been fully paid orsatisfied or provision for the payment thereof has been made inaccordance with the terms of the resolution or trust agreementsecuring the same, the board of commissioners and governing boardsmay declare the joint agency to be dissolved. On the effective dateof the resolution or ordinance, the title to all funds and other propertyowned by the joint agency at the time of the dissolution shall vest inthe member municipalities of the joint agency as provided in thischapter and the bylaws of the joint agency.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-25
Annual reports
Sec. 25. Annual Reports. The municipal utilities or joint agenciespossessing ownership interests in a project shall, following theclosing of each fiscal year, submit a consolidated or combined annualreport of their activities (including the activities of any joint agency)with respect to such project for the preceding year to the respectivegoverning bodies of such municipalities and to the commission. Eachreport shall set forth in a form prescribed by the commission acomplete operating and financial statement covering the operationsof the project during the year. The municipalities or joint agenciespossessing ownership interests in a project shall cause an audit of thebooks of record and accounts relating to such project (including anyjoint agency) to be made at least once in each year by a certified
public accountant or accountants and the cost of the audit may betreated as a cost of construction of the project, or otherwise as partof the expenses of the administration of the project covered by suchaudit.
As added by Acts 1980, P.L.68, SEC.1.
IC 8-1-2.2-26
Government grants and loans
Sec. 26. Government Grants and Loans. The governing body ofany municipality or the joint agency is hereby authorized to makeapplication and to enter into contracts for and to accept grants-in-aidand loans from the federal and state governments and their agenciesfor planning, acquiring, constructing, expanding, maintaining andoperating any project or facility, or participating in any research ordevelopment program, or performing any function which suchmunicipality or joint agency may be authorized by general or locallaw to provide or perform.
In order to exercise the authority granted by this section, thegoverning board of any municipality or joint agency may:
(1) enter into and carry out contracts with the state or federalgovernment or any agency or institution thereof under whichsuch government, agency or institution grants financial or otherassistance to the municipality or joint agency;