CHAPTER 5. LEASES WITH THE DEPARTMENT

IC 8-14.5-5
    Chapter 5. Leases With the Department

IC 8-14.5-5-1
Authority and department powers
    Sec. 1. (a) In addition to its other powers, the department mayenter into a lease or leases with the authority under section 2 or 3 ofthis chapter for any or all of the purposes set forth in this article.
    (b) The authority has all the powers necessary and incidental tocarry out the terms and conditions of leases under this chapter.
    (c) If the authority and the department decide to enter into a leaseunder this chapter, the authority and the department may enter intoa separate lease for each project or may enter into one (1) or moremaster leases for several projects.
As added by P.L.68-1988, SEC.12.

IC 8-14.5-5-2
Mandatory lease provisions
    Sec. 2. (a) A lease entered into under this section must include thefollowing:
        (1) A statement that the term of the lease is for a periodcoextensive with the biennium used for state budgetary andappropriation purposes with a fractional period when the leasebegins, if necessary.
        (2) A statement that the term of the lease is extended frombiennium to biennium, with the extensions not to exceed a leaseterm of twenty-five (25) years, unless either the authority or thedepartment gives notice of nonextension at least six (6) monthsbefore the end of a biennium, in which event the lease expiresat the end of the biennium in which the notice is given.
        (3) A provision plainly stating that the lease does not constitutean indebtedness of the state within the meaning or applicationof any constitutional provision or limitation, and that leaserentals are payable by the department solely from biennialappropriations, for the actual use or availability for use ofprojects provided by the authority, with payment commencingno earlier than the time the use or availability commences.
        (4) Provisions requiring the department to pay rent at times andin amounts sufficient to pay in full:
            (A) the debt service payable under the terms of any bonds ornotes issued by the authority and outstanding with respect toany project, including any required additions to reserves forthe bonds or notes maintained by the authority; and
            (B) additional rent as provided by the lease;
        subject to appropriation of money to pay lease rentals.
        (5) Provisions requiring the department to operate and maintainthe project or projects during the term of the lease.
        (6) A provision in each master lease for two (2) or moreprojects requiring that each project added to the master leaseshall be covered by a supplemental lease describing the

particular project, stating the additional rental payable andproviding that all lease covenants, including the obligation topay the original and additional rent under any supplement, shallbe unitary and include all projects covered, whether by themaster lease or a supplemental lease.
    (b) A lease entered into under this section may contain other termsand conditions that the authority and the department considerappropriate.
    (c) The department shall request an appropriation for payment oflease rentals on any lease entered into under this section in writingat a time sufficiently in advance of the date for payment of the leaserentals so that an appropriation may be made in the normal statebudgetary process.
    (d) If the department fails at any time to pay to the authority whendue any lease rentals on any lease under this section, the chairman ofthe authority shall immediately report the unpaid amount in writingto the governor and in an electronic format under IC 5-14-6 to thegeneral assembly.
As added by P.L.68-1988, SEC.12. Amended by P.L.28-2004,SEC.73.

IC 8-14.5-5-3
Mandatory lease provisions
    Sec. 3. (a) A lease entered into under this section must include thefollowing:
        (1) The term of the lease, which may not exceed weightedaverage useful life of the project or projects.
        (2) A provision plainly stating that the lease does not constitutean indebtedness of the state within the meaning or applicationof any constitutional provision or limitation, and that leaserentals are payable by the department solely for the annual useor availability for use of projects provided by the authority, withpayment commencing no earlier than the time the use oravailability commences.
        (3) Provisions requiring the department to pay rent at times andin amounts sufficient to pay in full the following:
            (A) The debt service payable under the terms of any bondsor notes issued by the authority and outstanding with respectto any project, including any required additions to reservesfor the bonds or notes maintained by the authority.
            (B) Additional rent as provided by the lease.
        (4) Provisions requiring the department to operate and maintainthe project or projects during the term of the lease.
        (5) A provision in each master lease for two (2) or moreprojects requiring that each project added to the master leaseshall be covered by a supplemental lease describing theparticular project, stating the additional rental payable andproviding that all lease covenants, including the obligation topay the original and additional rent under any supplement, shallbe unitary and include all projects covered, whether by the

master lease or a supplemental lease.
    (b) A lease entered into under this section may contain other termsand conditions that the authority and the department considerappropriate.
As added by P.L.68-1988, SEC.12.

IC 8-14.5-5-4
Sale or conveyance of transportation system
    Sec. 4. The department may sell, transfer, or convey by any meansany transportation system to the authority through negotiation of alease. The department may lease any existing transportation systemor property under its control to the authority for construction of aproject, which project may be leased to the department.
As added by P.L.68-1988, SEC.12.

IC 8-14.5-5-5
Payment from revenues; lease rentals; grant anticipation revenuebonds
    Sec. 5. The department shall pay lease rentals for leases enteredinto under this chapter and securing bonds issued under IC 8-14.5-6from revenues transferred to the state highway road construction andimprovement fund or the crossroads 2000 fund before making anyother disbursements from those funds. The department shall paylease rentals for leases entered into under this chapter and forsecuring grant anticipation revenue bonds or notes issued underIC 8-14.5-7 from federal highway revenues (as defined inIC 8-14.5-7-2) transferred to the grant anticipation fund beforemaking any other disbursements from the grant anticipation fund.
As added by P.L.68-1988, SEC.12. Amended by P.L.260-1997(ss),SEC.53; P.L.246-2005, SEC.82.