CHAPTER 10. BONDS
IC 13-26-10
Chapter 10. Bonds
IC 13-26-10-1
Issuance of revenue bonds
Sec. 1. A district may obtain money for the payment of the costs
of the works or an improvement, enlargement, or extension of the
works by the issuance of revenue bonds of the district. The principal
and interest of the revenue bonds must be paid solely from the net
revenues of the works.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-2
Loans from federal government
Sec. 2. A district obtaining a loan from the federal government or
an agency of the federal government may issue obligations under this
article to the federal government or agency to evidence the
indebtedness without advertising for or receiving bids. The
obligations:
(1) are payable solely from the net revenues of the works; and
(2) may be made of equal priority or subordinate to other
revenue bonds issued or to be issued under this article or
IC 13-3-2 (before its repeal).
As added by P.L.1-1996, SEC.16.
IC 13-26-10-3
Revenue bonds
Sec. 3. Revenue bonds may:
(1) bear interest, at a rate or rates not exceeding the maximum
determined by the board, that is payable or accretes as
determined by the board;
(2) mature at a time or times to be determined by ordinance; and
(3) be made redeemable before maturity at the option of the
district, to be exercised by the board, at not more than the par
value and a premium not exceeding five percent (5%) under
terms and conditions that are fixed by the ordinance authorizing
the issuance of the bonds.
As added by P.L.1-1996, SEC.16. Amended by P.L.53-2004, SEC.2.
IC 13-26-10-4
Revenue bonds; principal and interest
Sec. 4. The principal and interest of revenue bonds may be made
payable in any lawful medium. The ordinance must do the following:
(1) Determine the form of the bonds, including the interest
coupons, if any, to be attached.
(2) Fix the denomination or denominations of the bonds and the
place or places of payment of the principal and interest, which
may be any bank or trust company within or outside Indiana.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-5
Revenue bonds; terms
Sec. 5. (a) The revenue bonds must contain a statement on the
face of the bonds that the district is not obligated to pay the bonds or
the interest on the bonds except from the special fund provided from
the net revenues of the works.
(b) All bonds are negotiable instruments.
(c) The bonds and interest are exempt from all state, county, and
municipal taxation.
(d) The bonds may be registered in the name of the owner:
(1) as to principal alone; or
(2) as to both principal and interest.
Fully registered bonds may be made convertible to coupon bonds at
the option of the registered owner.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-6
Execution and attestation of bonds
Sec. 6. The:
(1) president of the board shall execute; and
(2) secretary of the board shall attest;
the bonds and coupons. The coupons must bear facsimile signature.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-7
Revenue bonds; sale procedure
Sec. 7. (a) Subject to subsection (b), the treasurer of the district
shall sell the revenue bonds in a manner and at a price that is
determined to be in the best interests of the district.
(b) If the bonds are sold at public sale, the bonds shall be sold in
accordance with IC 5-1-11 as IC 5-1-11 applies to counties.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-8
Revenue bonds; disposition of proceeds
Sec. 8. (a) A surplus of revenue bond proceeds over the cost of the
works shall be paid into the sinking fund provided by this article.
(b) If the proceeds of the bonds, by error of calculation or
otherwise, are less than the cost of the works, additional bonds may
in the same manner be issued to provide the amount of the deficit.
Unless otherwise provided in:
(1) the ordinance authorizing the issuance of the bonds first
issued; or
(2) the trust indenture authorized by this article or IC 13-3-2
(before its repeal);
the additional bonds are considered to be of the same issue and are
entitled to payment from the same fund, without preference or
priority of the bonds first issued.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-9
Temporary revenue bonds
Sec. 9. Before the preparation of the definite revenue bonds,
temporary revenue bonds under the same restrictions may be issued
with or without coupons, exchangeable for definite revenue bonds
upon the issuance of the latter.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-10
Loans from federal or state agency
Sec. 10. The fund to finance the construction of any of the
self-liquidating works authorized by this article may be obtained
from a federal or state agency.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-11
Action to contest validity of bonds
Sec. 11. An action to contest the validity of bonds issued under
this article or IC 13-3-2 (before its repeal) must be brought not later
than ten (10) days after the advertised sale date of the bonds.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-12
Issuance of additional bonds
Sec. 12. Subject to an ordinance or trust indenture pertaining to
outstanding bonds, additional bonds payable from the revenues of the
works may be authorized and issued in accordance with this article
for the purpose of improving, enlarging, or extending works acquired
or constructed under this article or IC 13-3-2 (before its repeal).
As added by P.L.1-1996, SEC.16.
IC 13-26-10-13
Trust indenture to secure bonds
Sec. 13. The board may secure the revenue bonds by a trust
indenture by and between the district and a corporate trustee, which
may be any trust company or bank having the powers of a trust
company within or outside Indiana. However, a trust indenture may
not convey or mortgage all or any part of the works.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-14
Contents of ordinance authorizing revenue bonds
Sec. 14. The ordinance authorizing the revenue bonds and fixing
the details of the revenue bonds may provide that the trust indenture
contain reasonable and lawful provisions for protecting and
enforcing the rights and remedies of the bondholders, including
covenants setting forth the duties of the district and the board in
relation to the following:
(1) The construction or acquisition of the works.
(2) The improvement, operation, repair, and maintenance of the
works.
(3) The issuance of bonds, including the custody, safeguarding,
and application of all money.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-15
Ordinance authorizing revenue bonds
Sec. 15. The ordinance may also provide that the works shall be
contracted for, constructed, and paid for under the supervision and
approval of consulting engineers employed or designated by the
board and satisfactory to the original bond purchasers, successors,
assigns, or nominees. The original bond purchasers, successors,
assigns, or nominees may be given the right to require that the
security given by:
(1) contractors; and
(2) any depository of the proceeds of bonds or revenues of the
works or other money pertaining to the works;
be satisfactory to the purchasers, successors, assigns, or nominees.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-16
Trust indenture; rights and remedies of bondholder and trustee
Sec. 16. The trust indenture may set forth the rights and remedies
of the bondholders or trustee, restricting the individual right of action
of bondholders as is customary in trust indentures securing bonds
and debentures of corporations.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-17
Payment of bond sale proceeds and revenue of works
Sec. 17. Unless this article otherwise provides, the board may
provide by ordinance or in the trust indenture for the payment of:
(1) the proceeds of the sale of the bonds; and
(2) the revenues of the works;
to the officer, board, or depository that the board determines for the
custody of the money and for the method of disbursement, with
safeguards and restrictions that the board determines.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-18
Sinking fund for payment of bonds
Sec. 18. (a) At or before the time of issuance of the revenue
bonds, the board shall by ordinance create a sinking fund for the
payment of the following:
(1) The bonds.
(2) The interest on the bonds.
(3) The charges of banks or trust companies for making
payment of the bonds or interest.
(b) The board shall set aside and pledge the net revenues of the
works remaining after the payment of the reasonable expense of
operation, repair, and maintenance of the works for payment of the:
(1) principal of and interest on all bonds payable from the
revenues of the works, to the extent necessary for that purpose;
and
(2) necessary fiscal agency charges for paying the principal and
interest of the bonds.
(c) The ordinance may also provide for the accumulation of
reasonable reserves in the sinking fund:
(1) as a margin for safety and a protection against default; and
(2) for the payment of premiums upon bonds retired by call or
purchase as provided by this article.
As added by P.L.1-1996, SEC.16.
IC 13-26-10-19
Rights of revenue bondholders
Sec. 19. (a) The holder of revenue bonds or attached coupons and
the trustee, if any, except to the extent the rights given may be
restricted by the ordinance authorizing issuance of the bonds or by
the trust indenture, may, by civil action, protect and enforce rights
granted:
(1) by this article or IC 13-3-2 (before its repeal); or
(2) under the ordinance or trust indenture;
to be performed by the district issuing the bonds or by the board or
any officer, including the making and collecting of reasonable and
sufficient charges and rates for services provided by the works.
(b) If there is failure to pay the principal or interest on any of the
revenue bonds on the date named for payment, and upon application
by a bondholder or a trustee, any court having jurisdiction to appoint
receivers shall appoint a receiver to administer the works on behalf
of the district and the bondholders or trustee. A receiver may do the
following:
(1) Charge and collect rates sufficient to provide for the
payment of the expenses of operation, repair, and maintenance.
(2) Pay any revenue bonds and interest outstanding.
(3) Apply the revenues in conformity with this article and the
ordinance or trust indenture.
As added by P.L.1-1996, SEC.16.