Ind. Code ch. 5-1.5-8

Ind. Code ch. 5-1.5-8
in effect

Ind. Code § 5-1.5-8-1 Purchase of securities offered by qualified entity; private sale; issuance of bonds and notes for purpose of purchase

Sec. 1. The bank, to carry out the purposes and policies of this article, may purchase securities of the qualified entity, including any securities issued by a school corporation to refund bonds or other obligations that were issued or entered into by a school corporation before that school corporation completed a consolidation or merger under IC 20-23 or any other law. Notwithstanding any law to the contrary, a qualified entity may sell its securities to the bank at a negotiated, private sale. The bank, for this purpose, may issue its bonds and notes payable solely from the revenues or funds available to the bank for such payment and may otherwise assist qualified entities as provided in this article. As added by P.L.25-1984, SEC.1. Amended by P.L.28-1992, SEC.3; P.L.140-2014, SEC.1.

Ind. Code § 5-1.5-8-2 Securities to be purchased and held in name of bank; required documentation

Sec. 2. (a) All securities at any time purchased, held, or owned by the bank shall at all times be purchased and held in the name of the bank. (b) Except for agreements described in IC 5-1.5-1-10(4), all securities at any time purchased by the bank, upon delivery to the bank, shall, unless waived by the board, be accompanied by all documentation required by the board that shall include an approving opinion of recognized bond counsel, certification and guarantee of signatures, and certification as to no litigation pending as of the date of delivery of the securities challenging the validity or issuance of such securities. As added by P.L.25-1984, SEC.1. Amended by P.L.44-1990, SEC.3; P.L.28-1992, SEC.4.

Ind. Code § 5-1.5-8-3 Contracts with bank; terms and conditions; fees and charges; denomination and prices

Sec. 3. (a) Every qualified entity is authorized and empowered to contract with the bank with respect to the loan or purchase of its securities, and the contracts shall contain the terms and conditions of the loan or purchase and may be in any form agreed to by the bank and the qualified entity, including a customary form of bond ordinance or resolution. Every qualified entity is authorized and empowered to pay fees and charges required to be paid to the bank for its services. (b) Notwithstanding any statute applicable to or constituting any limitation on the sale of bonds or notes or on entry into an agreement, any qualified entity may sell its securities to the bank, without limitation as to denomination, at a private sale at such price or prices as may be determined by the bank and the qualified entity. (c) Notwithstanding any law that applies to or constitutes a limitation on the leasing or disposition of materials or other property, and subject to subsection (d), any qualified entity, or any purchasing agency (as defined in IC 5-22-2-25) of a qualified entity, may: (1) assign or sell a lease or purchase contract for property to the bank; (2) enter into a lease or purchase contract for property with the bank; or (3) buy property from or sell property to the bank; at any price and under any other terms and conditions as may be determined by the bank and the qualified entity. (d) This subsection does not apply to a school corporation that buys or leases a school bus from the bank under IC 5-1.5-4-1(a)(5). Before taking an action described under subsection (c)(1) through (c)(3) that would otherwise be subject to IC 5-22, a qualified entity or its purchasing agent must obtain or cause to be obtained a purchase price for the property to be subject to the sale, purchase contract, or lease from the lowest responsible and responsive bidder in accordance with the requirements for the purchase of supplies under IC 5-22. As added by P.L.25-1984, SEC.1. Amended by P.L.46-1987, SEC.14; P.L.48-1989, SEC.2; P.L.49-1997, SEC.25; P.L.192-2006, SEC.2.

Ind. Code § 5-1.5-8-4 Agreement with bank; waiver of statutory defenses to nonpayment; rights and remedies of bank

Sec. 4. Upon the sale and delivery by a qualified entity of any securities to the bank, the qualified entity shall be deemed to have agreed that upon its failure to pay interest or principal on the securities owned or held by or arising from an agreement with the bank when payable, all statutory defenses to nonpayment are waived. Upon nonpayment and demand on the qualified entity for payment, if the securities are payable from property taxes and funds are not available in the treasury of the qualified entity to make payment, an action in mandamus for the levy of a tax to pay the interest and principal on the securities shall lie, and the bank shall be constituted a holder or owner of the securities as being in default. The bank may thereupon avail itself of all remedies, rights, and provisions of law applicable in the circumstances, and the failure to exercise or exert any rights or remedies within a time or period provided by law may not be raised as a defense by the qualified entity. The bank may carry out this section and exercise all the rights, remedies, and provisions of law provided or referred to in this section. As added by P.L.25-1984, SEC.1. Amended by P.L.46-1987, SEC.15.

Ind. Code § 5-1.5-8-5 Department or agency of state as custodian of money payable to qualified entity; duty on default on payment of principal or interest by qualified entity

Sec. 5. (a) Notwithstanding any other provision of law, to the extent that any department or agency of the state, including the treasurer of state, is the custodian of money payable to the qualified entity (other than for goods or services provided by the qualified entity), at any time after written notice to the department or agency head from the bank that the qualified entity is in default on the payment of principal or interest on the securities of the qualified entity then held or owned by or arising from an agreement with the bank, the department or agency shall withhold the payment of that money from that qualified entity and pay over the money to the bank for the purpose of paying principal of and interest on bonds of the bank. However, the withholding of payment from the qualified entity and payment to the bank under this section must not adversely affect the validity of the security in default. (b) This subsection applies to securities of a qualified entity acquired by the bank, or arising from an agreement entered into with the bank, on or after March 1, 2016. Upon receiving notice from the bank that a qualified entity has failed to pay when due the principal or interest on the securities of the qualified entity then held or owned by or arising from an agreement with the bank, the fiscal officer (as defined in IC 36-1-2-7) of the county, for any county in which the qualified entity is wholly or partially located, shall do the following: (1) Reduce the amount of any revenues or other money or property that: (A) is held, possessed, maintained, controlled, or otherwise in the custody of the county or a department, an agency, or an instrumentality of the county; and (B) would otherwise be available for distribution to the qualified entity under any other law; by an amount equal to the amount of the qualified entity's unpaid securities. (2) Pay the amount by which the revenues or other money or property is reduced under subdivision (1) to the bank to pay the principal of and interest on bonds or other obligations of the bank. (3) Notify the qualified entity that the revenues or other money or property, which would otherwise be available for distribution to the qualified entity, has been reduced by an amount necessary to satisfy all or part of the qualified entity's unpaid securities to the bank. (c) This subsection applies to securities of a qualified entity acquired by the bank, or arising from an agreement with the bank, that is covered by subsection (b). A reduction under subsection (b) must be made as follows: (1) First, from local income tax distributions under IC 6-3.6-9 that would otherwise be distributed to the qualified entity under the schedules in IC 6-3.6-9-12 and IC 6-3.6-9-16. (2) Second, from any other revenues or other money or property that: (A) is held, possessed, maintained, or controlled by, or otherwise in the custody of, the county or a department, an agency, or an instrumentality of the county; and (B) would otherwise be available for distribution to the qualified entity under any other law. As added by P.L.25-1984, SEC.1. Amended by P.L.43-1985, SEC.26; P.L.46-1987, SEC.16; P.L.47-2016, SEC.1.

Ind. Code § 5-1.5-8-5.1 Authorization to convey revenue or taxes to issuing entity

Sec. 5.1. (a) The following definitions apply throughout this section: (1) "Assignment agreement" means an agreement between a qualified entity and the issuing entity for the conveyance of all or part of any revenues or taxes received by the qualified entity from a disbursement agent. (2) "Conveyance" means an assignment, sale, transfer, or other conveyance. (3) "Deposit account" means a designated escrow account established by the issuing entity at a trust company or bank having trust powers for the deposit of transferred receipts under an assignment agreement. (4) "Disbursement agent" means a state disbursement agent or local disbursement agent. (5) "Issuing entity" means: (A) the bank; (B) a corporation, trust, or other entity that has been established by the bank for the limited purpose of issuing obligations for the benefit of the bank and any qualified entity; or (C) a bank or trust company in its capacity as trustee for obligations issued by an entity identified in clause (A) or (B). (6) "Local disbursement agent" means: (A) the fiscal officer (as defined in IC 36-1-2-7) of the county for any county in which a qualified entity is wholly or partially located; (B) the fiscal officer for a qualified entity; or (C) the treasurer of a school corporation. (7) "State disbursement agent" means the state treasurer, the state comptroller, or the state department of revenue. (8) "Transferred receipts" means all or part of any revenues or taxes received from a disbursement agent that have been conveyed by a qualified entity under an assignment agreement. (9) "Statutory lien" has the meaning given to that term under 11 U.S.C. 101(53) of the federal bankruptcy code. (b) Subject to approval from the board under subsection (j), any qualified entity that receives revenues or taxes from a disbursement agent may (to the extent not prohibited by any applicable statute, regulation, rule, resolution, ordinance, or agreement governing the use of the revenues or taxes) authorize, by ordinance or resolution, the conveyance of all or any portion of the revenues or taxes to an issuing entity. Any conveyance of transferred receipts shall: (1) be made pursuant to an assignment agreement in exchange for the net proceeds of obligations issued by the issuing entity for the benefit of the qualified entity and shall, for all purposes, constitute an absolute conveyance of all right, title, and interest therein; (2) not be deemed a pledge or other security interest for any borrowing by the qualified entity; (3) be valid, binding, and enforceable in accordance with the terms thereof and of any related instrument, agreement, or other arrangement, including any pledge, grant of security interest, or other encumbrance made by the issuing entity to secure any obligations issued by the issuing entity for the benefit of the qualified entity; and (4) not be subject to disavowal, disaffirmance, cancellation, or avoidance by reason of insolvency of any party, lack of consideration, or any other fact, occurrence, or state law or rule. On and after the effective date of the conveyance of the transferred receipts: (A) the qualified entity shall have no right, title, or interest in or to the transferred receipts conveyed; and (B) the transferred receipts conveyed shall be the property of the issuing entity to the extent necessary to pay the obligations issued by the issuing entity for the benefit of the qualified entity, and shall be received, held, and disbursed by the issuing entity in a trust fund outside the treasury of the qualified entity. An assignment agreement may provide for the periodic reconveyance to the qualified entity of amounts of transferred receipts remaining after the payment of the obligations issued by the issuing entity for the benefit of the qualified entity. (c) In connection with any conveyance of transferred receipts, the qualified entity is authorized to direct the applicable disbursement agent to deposit or cause to be deposited any amount of the transferred receipts into a deposit account in order to secure the obligations issued by the issuing entity for the benefit of the qualified entity. If the qualified entity states that the direction is irrevocable, the direction shall be treated by the applicable disbursement agent as irrevocable with respect to the transferred receipts described in the direction. Notwithstanding any other law, each disbursement agent shall comply with the terms of any such direction received from a qualified entity and shall execute and deliver the acknowledgments and agreements, including escrow and similar agreements, as the qualified entity may require to effectuate the deposit of transferred receipts in accordance with the direction of the qualified entity. Notwithstanding any other law, the disbursement agent shall distribute the transferred receipts to the deposit account in accordance with the written authorization and direction from the qualified entity set forth in the assignment agreement and any related escrow and similar agreements, and upon each distribution of transferred receipts in accordance with the direction from the qualified entity, the disbursement agent shall have no further duty or responsibility with respect to the distribution of transferred receipts. (d) Not later than the date of issuance by an issuing entity of any obligations secured by collections of transferred receipts, a certified copy of the ordinance or resolution authorizing the conveyance of the right to receive the transferred receipts, executed copies of the applicable assignment agreement, the agreement providing for the establishment of the deposit account, and a notice designating the dates that the disbursement agent's duty to distribute transferred receipts to the deposit account shall begin and end shall be filed with: (1) the disbursement agent having custody of the transferred receipts; (2) if the conveyance of transferred receipts consists of all or a portion of local income tax revenues under IC 6-3.6, the adopting body (as defined in IC 6-3.6-3-1) having jurisdiction over the applicable tax rate and allocations affecting such local income tax revenues; and (3) the Indiana transparency website established under IC 5-14-3.8 in a manner prescribed by the state examiner. The state examiner shall make the information available to the department of local government finance. (e) Any obligations of an issuing entity issued or incurred to provide funds to purchase any transferred receipts from a qualified entity under this chapter shall be entitled to the following benefits and protections: (1) The obligations issued by an issuing entity shall be secured by a statutory lien on the transferred receipts received, or entitled to be received, by the issuing entity that are designated as pledged for such obligations of the issuing entity. The statutory lien shall automatically attach from the time the obligations of the issuing entity are issued without further action or authorization by the issuing entity or any other entity, person, governmental authority, or officer. The statutory lien shall be valid and binding from the time the obligations of the issuing entity are executed and delivered without any physical delivery thereof or further act required, and shall be a first priority lien, unless the obligations, or the documents authorizing the obligations or providing a source of payment or security for those obligations, shall otherwise provide. (2) The transferred receipts received or entitled to be received shall be immediately subject to the statutory lien from the time the obligations of the issuing entity are issued, and the statutory lien shall automatically attach to the transferred receipts (whether received or entitled to be received by the issuing entity) and be effective, binding, and enforceable against the issuing entity, the qualified entity, the disbursement agent, the state, and their agents, successors, transferees and creditors, and all others asserting rights therein or having claims of any kind in tort, contract, or otherwise, irrespective of whether those parties have notice of the lien and without the need for any physical delivery, recordation, filing, or further act. (3) The statutory lien imposed by this section is automatically released and discharged with respect to amounts of transferred receipts reconveyed to the qualified entity pursuant to subsection (b)(4), effective upon the reconveyance. (4) The statutory lien provided in this section is separate from and shall not affect any special revenues lien or other protection afforded to special revenue obligations under the federal Bankruptcy Code. (f) The state covenants with each qualified entity, the issuing entity, each disbursement agent, and the purchasers or owners of the issuing entity's obligations that the state will not limit or alter the rights and powers vested in the qualified entity, the issuing entity, and the state entities by this section with respect to the disposition of transferred receipts so as to impair the terms of any contract, including any assignment agreement, made by the qualified entity with the issuing entity or any contract executed by the issuing entity in connection with the issuance of obligations by the issuing entity for the benefit of the qualified entity, until all requirements with respect to the deposit by the disbursement agent of transferred receipts for the benefit of the issuing entity have been fully met and the obligations of the issuing entity related thereto have been discharged and satisfied. In addition, the state covenants with each qualified entity, the issuing entity, each disbursement agent, and the purchasers or owners of the issuing entity's obligations that the state will not limit or alter the basis on which the qualified entity's share or percentage of transferred receipts is derived, or the use of the funds, so as to impair the terms of any such contract. Nothing contained in this chapter shall be construed or interpreted as creating a debt of the state within the meaning of the limitation on or prohibition against state indebtedness under the Constitution of the State of Indiana or interpreted to construe the state as a guarantor of any debt or obligation subject to an assignment agreement under this section. (g) In the case of a qualified entity that has authorized the conveyance of all or a portion of its local income tax revenues imposed under IC 6-3.6 and executed an assignment agreement with respect thereto, obligations of the issuing entity issued for the benefit of the qualified entity, together with the debt service owed each year thereon, shall be: (1) included as part of the outstanding debt service of the qualified entity solely for purposes of calculating the minimum coverage ratio under IC 6-3.6-4-3; and (2) treated as outstanding obligations of the qualified entity payable from the revenues solely for purposes of limiting the reduction of the proportional allocation of revenues under IC 6-3.6-6-3 and IC 6-3.6-6-5. This subsection shall not be construed as a pledge of the transferred receipts or the granting of a security interest therein by the qualified entity, and is included solely for the purpose of computing the limitations on the reductions to the tax rate and allocations set forth under IC 6-3.6-4-3, IC 6-3.6-6-3, and IC 6-3.6-6-5. (h) The bank is authorized to create one (1) or more nonprofit corporations in order to effectuate the purposes of this chapter and the bank may grant or delegate to any such nonprofit corporation powers of the bank as may be necessary, convenient, or appropriate to carry out and effectuate the public and corporate purposes of this article. (i) A qualified entity may not enter into assignment agreements in a manner inconsistent with the provisions of this chapter. This chapter constitutes the specific manner for exercising the power to enter into assignment agreements for purposes of IC 20-26-3, IC 36-1-3, or any other statute granting home rule power to a qualified entity. (j) Before a qualified entity may adopt an ordinance or resolution described in subsection (b), the board must have adopted a resolution approving the qualified entity's proposed conveyance of transferred receipts to the issuing body. The resolution of the board may be preliminary in nature and may contain such terms and conditions that the board deems advisable. If, after receiving approval from the board, the qualified entity adopts an ordinance or resolution described in subsection (b), the qualified entity shall provide a certified copy of the ordinance or resolution to the bank. The bank shall notify the distressed unit appeal board of each qualified entity that adopts an ordinance or resolution under this section. As added by P.L.259-2019, SEC.7. Amended by P.L.156-2020, SEC.11; P.L.9-2024, SEC.118.

Ind. Code § 5-1.5-8-6.1 Anticipation notes; issuance and purchase

Sec. 6.1. (a) Notwithstanding any law applicable to a qualified entity concerning the issuance of bonds, a qualified entity that has complied with all statutory requirements for the issuance of its bonds may, in lieu of issuing bonds at that time and without the need for complying with any other law applicable to the issuance of bonds, notes, or other evidences of indebtedness, issue its notes in anticipation of the issuance of bonds to the bank, and the bank may purchase the bond anticipation notes. The bond anticipation notes may be issued on terms set forth in a resolution authorizing their issuance and in any amount equal to or less than the amount of bonds authorized to be issued. The qualified entity may renew or extend the bond anticipation notes from time to time on terms agreed to with the bank, and the bank may purchase the renewals or extensions. The amount of the accrued interest on the date of renewal or extension may be paid or added to the principal amount of the note being renewed or extended so long as the aggregate principal amount of bond anticipation notes outstanding at any time does not exceed the maximum principal amount permitted by this section. The bond anticipation notes of the qualified entity, including any renewals or extensions, must mature in the amounts and at the times (not exceeding five (5) years from the date of the original issuance of the bond anticipation notes) agreed to by the qualified entity and the bank. The bond anticipation notes must be finally paid, and interest on the bond anticipation notes may be finally paid, with the proceeds of the bonds issued by the qualified entity. In connection with the issuance of bonds part or all of the proceeds of which will be used to retire the bond anticipation notes, it is not necessary for the qualified entity to repeat the procedures for the issuance of bonds, as the procedures followed before the issuance of the bond anticipation notes are for all purposes sufficient to authorize the issuance of the bonds. (b) In connection with the purchase of bond anticipation notes, the bank may by agreement with the qualified entity impose any terms, conditions, and limitations as in its opinion are proper for the security of the bank and the holders of its bonds or notes. If the qualified entity fails to comply with the agreement or to issue its bonds to retire its bond anticipation notes, the bank may enforce all rights and remedies provided in the agreement or at law, including an action in mandamus to compel the issuance of bonds by the qualified entity. As added by P.L.43-1985, SEC.27.

Ind. Code § 5-1.5-8-7 Investment and reinvestment; securities sold to bank

Sec. 7. Notwithstanding any statute applicable to or constituting any limitation on the investment or reinvestment of funds by or on behalf of political subdivisions, a qualified entity selling securities to the bank in connection with a program established by the bank may invest and reinvest funds that constitute, replace, or substitute for the proceeds of securities sold to the bank under an established bank program in any instrument or other investment authorized under a resolution of the bank. As added by P.L.29-1992, SEC.3.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://iga.in.gov/laws/2026/ic/titles/5Fetched: 10/17/2026