CHAPTER 6. ISSUANCE OF BONDS AND NOTES
IC 8-14.5-6
Chapter 6. Issuance of Bonds and Notes
IC 8-14.5-6-1
Bond and note authorization
Sec. 1. Except as provided in sections 2 and 5 of this chapter, theauthority may, by resolution, issue and sell bonds or notes of theauthority for the purpose of providing funds to carry out theprovisions of this article with respect to the construction of a projector projects or the refunding of any bonds or notes, together with anyreasonable costs associated with a refunding. However, the authoritymay not issue any bonds or notes for the construction of a projectafter July 1, 2007.
As added by P.L.68-1988, SEC.12. Amended by P.L.260-1997(ss),SEC.54.
IC 8-14.5-6-2
Approval; identification of funding objectives
Sec. 2. (a) Before the issuance of bonds or notes, the authoritymust receive the approval of:
(1) the commissioner of the Indiana department oftransportation; and
(2) the budget agency.
(b) Before the issuance of bonds or notes, the department shallidentify:
(1) the project or projects to be financed from the proceeds ofthe bonds or notes; or
(2) the project or projects proposed to be financed from theproceeds of the bonds or notes, the projected cost and usefullife of which will form a basis upon which the authority mayreasonably determine that the limitations in sections 3 and 5(b)of this chapter will be complied with if the proposed project orprojects are financed from the bonds or notes.
As added by P.L.68-1988, SEC.12. Amended by P.L.112-1989,SEC.4; P.L.260-1997(ss), SEC.55.
IC 8-14.5-6-3
Weighted average useful life of project; term of bonds and interest
Sec. 3. (a) The construction of a project may not be financedunder this article if at the time the lease with respect to the project isinitially entered into the weighted average useful life of the projectis less than five (5) years.
(b) For purposes of this section and section 5 of this chapter, acertificate of the department as to the weighted average useful life ofthe project is conclusive with respect to the matters contained in thecertificate.
(c) If any bonds or notes bear interest at a variable or adjustablerate, lease rentals under any lease or leases attributable to debtservice shall be fixed over the term of the lease or leases based on thefair and reasonable value of the project or projects leased.As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-4
Notice of bond issue; publication; time for contesting validity;subsequent leases
Sec. 4. (a) Before issuing a series of bonds or notes, the authorityshall publish a notice of its determination to issue the bonds or notes.The notice shall be published one (1) time in two (2) newspaperspublished and of general circulation in the city of Indianapolis.
(b) No action to contest the validity of:
(1) any contract entered into by the department and theauthority before the bonds or notes are issued;
(2) any lease entered into by the department and the authoritybefore the bonds or notes are issued to secure a series of bondsor notes; or
(3) a series of bonds or notes issued by the authority;
may be brought after the fifteenth day following publication of thenotice required by subsection (a).
(c) If a lease or contract is entered into under this chapter afterbonds or notes relating to the lease or contract are issued, theauthority may publish notice of execution of the lease or contract asset forth in subsection (a). No action to contest the validity of sucha lease or contract may be brought after the fifteenth day followingpublication of the notice.
(d) If an action challenging a lease, contract, bonds, or notes is notbrought within the time prescribed by this section, the lease, contract,bonds, or notes shall be conclusively presumed to be fully authorizedand valid under the laws of the state and any person or entity isestopped from further questioning the authorization, validity,execution, delivery, or issuance of the contract, lease, bonds or notes.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-5
Bond and note provisions; weighted average life
Sec. 5. (a) The bonds or notes must indicate on their face:
(1) the maturity date or dates, as determined under subsection(b);
(2) the interest rate or rates (whether fixed, variable, or acombination of fixed or variable) or the manner in which theinterest rate or rates will be determined if variable or adjustablerates are used;
(3) registration privileges and place of payment, includingprovisions for book entry obligations as set forth in IC 5-1-15;
(4) the conditions and terms under which the bonds or notesmay be redeemed or prepaid before maturity; and
(5) their source of payment as set forth in section 10 of thischapter.
(b) The weighted average life of the bonds or notes may notexceed the sum of:
(1) the weighted average useful life of the project or projects to
be financed from the proceeds of the bonds or notes; plus
(2) the period of construction of the project or projects.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-6
Manual or facsimile signatures; seal
Sec. 6. The bonds or notes:
(1) shall be executed by the manual or facsimile signature of thechairman or vice chairman of the authority;
(2) shall be attested by the manual or facsimile signature of thepublic finance director;
(3) shall be imprinted or impressed with the seal of the authorityby any means;
(4) may be authenticated by a trustee, registrar, or paying agent;and
(5) constitute valid and binding obligations of the authority,even if the chairman, vice chairman, or public finance directorwhose manual or facsimile signature appears on the bonds ornotes no longer holds that office.
As added by P.L.68-1988, SEC.12. Amended by P.L.162-2007,SEC.31.
IC 8-14.5-6-7
Negotiable instrument nature of bonds or notes
Sec. 7. The bonds or notes, when issued, have all the qualities ofnegotiable instruments, subject to provisions for registration, underIC 26 and are incontestable in the hands of a bona fide purchaser orowner of the bonds or notes for value.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-8
Public or negotiated sale
Sec. 8. The bonds or notes may be sold by the authority at a publicor a negotiated sale at a time or times determined by the authorityand at a premium or discount as determined by the authority. Indetermining the amount of bonds or notes to be issued and sold, theauthority may include the costs of construction or of refunding bondsor notes, including reasonable debt service reserves, and all otherexpenses necessary or incident to the construction of the project, arefunding, or the issuance of the bonds or notes.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-9
Appropriated purpose of proceeds; maturities
Sec. 9. The proceeds of the bonds or notes are appropriated for thepurpose for which the bonds or notes may be issued and the proceedsshall be deposited and disbursed in accordance with any provisionsand restrictions that the authority may provide in the resolution ortrust agreement authorizing the issuance of the bonds or notes. Thematurities of the bonds or notes, the rights of the owners, and the
rights, duties, and obligations of the authority are governed in allrespects by this article and the resolution or trust agreement.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-10
Bonds or notes of authority not state indebtedness; funds fromwhich payable
Sec. 10. The bonds or notes:
(1) constitute the corporate obligations of the authority;
(2) do not constitute an indebtedness of the state within themeaning or application of any constitutional provision orlimitation; and
(3) are payable solely as to both principal and interest from:
(A) the revenues from a lease to the department, if any;
(B) proceeds of bonds or notes, if any; or
(C) investment earnings on proceeds of bonds or notes.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-11
Enforcement of article and undertaking
Sec. 11. The provisions of this article and the covenants andundertakings of the authority as expressed in any proceedingspreliminary to or in connection with the issuance of the bonds ornotes may be enforced, subject to the provisions of any resolution ortrust agreement, by a bond or note owner by action for injunction ormandamus against the authority or any officer, agent, or employee ofthe authority. However, no action for monetary judgment may bebrought against the state for any violations of this article or forpayment of the bonds or notes of the authority.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-12
Tax exemption
Sec. 12. All bonds or notes issued under this article are issued bya body corporate and politic of this state, but not a state agency, andfor an essential public and governmental purpose. The bonds andnotes, the interest on the bonds and notes, the proceeds received byan owner from the sale of the bonds or notes to the extent of theowner's cost of acquisition, proceeds received upon redemption formaturity, proceeds received at maturity, and the receipt of the interestand proceeds are exempt from taxation for all purposes except thefinancial institutions tax imposed under IC 6-5.5 or a stateinheritance tax imposed under IC 6-4.1.
As added by P.L.68-1988, SEC.12. Amended by P.L.21-1990,SEC.40; P.L.254-1997(ss), SEC.14.
IC 8-14.5-6-13
Bonds and notes as legal investment
Sec. 13. Notwithstanding any other law, all financial institutions,investment companies, insurance companies, insurance associations,
executors, administrators, guardians, trustees, and other fiduciariesmay legally invest sinking funds, money, or other funds belonging tothem or within their control in bonds or notes issued under thischapter.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-14
Security registration exemption
Sec. 14. Bonds or notes issued under this chapter are exempt fromthe registration requirements of IC 23-19 and any other statesecurities registration statutes.
As added by P.L.68-1988, SEC.12. Amended by P.L.27-2007, SEC.7.
IC 8-14.5-6-15
Pledges
Sec. 15. A pledge of lease rentals, proceeds of bonds or notes,investment earnings on those proceeds, or other money pledged bythe authority is binding from the time the pledge is made. Leaserentals, proceeds of bonds or notes, investment earnings on thoseproceeds, or other money pledged by the authority and thereafterreceived by the authority or its trustee or fiduciary is immediatelysubject to the lien of the pledge without any further act, and the lienof the pledge is binding against all parties having claims of any kindin tort, contract, or otherwise against the authority, regardless ofwhether the parties have notice of the lien. A resolution, trustagreement, or any other instrument by which a pledge is created isrequired to be filed or recorded only in the records of the authority.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-16
Insurance or guaranty of payment
Sec. 16. The authority may obtain from a department or agency ofthe state or of the United States, or from a nongovernmental insurer,available insurance or guaranty for the payment or repayment ofinterest or principal, or both, or any part of interest or principal, orany debt service reserve funds, on bonds or notes issued by theauthority, or on securities purchased or held by the authority.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-17
Credit enhancement or liquidity support agreements
Sec. 17. The authority may enter into agreements with an entityto provide credit enhancement or liquidity support for any bonds ornotes issued by the authority, or for any debt service reservessecuring any bonds or notes, with terms that are reasonable andproper, in the discretion of the authority, and not in violation of law.The authority may execute and deliver notes to evidence itsobligation to make payments under such an agreement, but thesenotes must conform to the provisions of this article in all respects.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-18
Service agreements with financial institutions
Sec. 18. The authority may enter into agreements or contracts withany financial institution as may be necessary, desirable, orconvenient in the opinion of the authority for rendering services inconnection with:
(1) the care, custody, or safekeeping of securities or otherinvestments held or owned by the authority;
(2) the payment or collection of amounts payable as to principalor interest; and
(3) the delivery to the authority of securities or otherinvestments purchased or sold by it.
The authority may also, in connection with any of the servicesrendered by a financial institution as to custody and safekeeping ofits securities or investments, require security in the form of collateralbonds, surety agreements, or security agreements as, in the opinionof the authority, is necessary or desirable.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-19
Trust agreements or resolutions
Sec. 19. (a) In the discretion of the authority, any bonds and notesissued under this chapter may be secured by a trust agreement by andbetween the authority and a corporate trustee, which may be any trustcompany or bank having the powers of a trust company in Indiana.Such a trust agreement may also provide for a cotrustee, which maybe any trust company or bank in Indiana or another state.
(b) The trust agreement or the resolution providing for theissuance of the bonds or notes may contain provisions for protectingand enforcing the rights and remedies of the owners of bonds ornotes as may be reasonable and proper, in the discretion of theauthority, and not in violation of law.
(c) The trust agreement or resolution may set forth the rights andremedies of the owners of any bonds or notes of the trustee and mayrestrict the individual right of action by the owners.
(d) Any trust agreement or resolution may contain otherprovisions that the authority considers reasonable and proper for thesecurity of the owners of bonds or notes.
(e) All expenses incurred in carrying out the provisions of thetrust agreement or resolution may be paid from money pledged orassigned to the payment of the principal of and interest on bonds ornotes or from any other funds available to the authority.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-20
Authority purchase of its own bonds or notes
Sec. 20. The authority may purchase bonds or notes of theauthority out of its funds or money available for the purchase of itsown bonds or notes. The authority may hold, cancel, or resell thebonds or notes subject to, and in accordance with, agreements with
owners of its bonds or notes. Unless cancelled, bonds or notes soheld shall be considered to be held for resale or transfer and theobligation evidenced by the bonds or notes shall not be consideredto be extinguished.
As added by P.L.68-1988, SEC.12.
IC 8-14.5-6-21
Investment of authority funds
Sec. 21. Funds or money held by the authority under any trustagreement or resolution may be invested pending disbursement asprovided in the trust agreement or the resolution. Such an investmentis not restricted by or subject to the provisions of any other law.
As added by P.L.68-1988, SEC.12.