Citations Affected: IC 5-1.5; IC 6-3.5; IC 8-14; IC 36-7.6.
January 26, 2007, read first time and referred to Committee on Local Government.
February 12, 2007, reported _ Do Pass.
February 19, 2007, read second time, amended, ordered engrossed.
February 20, 2007, engrossed.
February 26, 2007, read third time, passed. Yeas 71, nays 25.
council, the budget committee, and the governor concerning the operations and activities of the development authority during the preceding state fiscal year. Authorizes a development authority to enter into an agreement to jointly equip, own, lease, and finance projects and facilities or otherwise carry out the purposes of the development authority. Requires a development authority to: (1) assist in the coordination of local efforts concerning airport development projects and transportation projects; (2) assist a commuter transportation district and an airport authority in coordinating regional transportation and economic development efforts; and (3) fund various projects and facilities, including intermodal transportation projects and facilities and regional trails and greenways.
A BILL FOR AN ACT to amend the Indiana Code concerning local
government.
agreement executed by a qualified entity under IC 21-1-5;
IC 20-49-4;
may not exceed one billion dollars ($1,000,000,000) for qualified
entities described in IC 5-1.5-1-8(1) through IC 5-1.5-1-8(4), and
IC 5-1.5-1-8(8) through IC 5-1.5-1-8(11), and IC 5-1.5-1-8(14).
(d) Notwithstanding subsections (a) and (b), the total amount of
bank bonds and notes outstanding at any one (1) time, except bonds or
notes issued to fund or refund bonds or notes, may not exceed two
hundred million dollars ($200,000,000) for qualified entities described
in IC 5-1.5-1-8(5) through IC 5-1.5-1-8(6).
(e) Notwithstanding subsections (a) and (b), the total amount of
bank bonds and notes outstanding at any one (1) time, except bonds or
notes issued to fund or refund bonds or notes, may not exceed thirty
million dollars ($30,000,000) for qualified entities described in
IC 5-1.5-1-8(7).
(f) The limitations contained in subsections (c), (d), and (e) do not
apply to bonds, notes, or other obligations of the bank if:
(1) the bonds, notes, or other obligations are not secured by a
reserve fund under IC 5-1.5-5; or
(2) funds and investments, and the anticipated earned interest on
those funds and investments, are irrevocably set aside in amounts
sufficient to pay the principal, interest, and premium on the
bonds, notes, or obligations at their respective maturities or on the
date or dates fixed for redemption.
concerning the imposition of the county option income tax.
(b) Except as provided in subsections (c), (g), (k), (p), and (r) and
section 28 of this chapter, the county economic development income
tax may be imposed at a rate of:
(1) one-tenth percent (0.1%);
(2) two-tenths percent (0.2%);
(3) twenty-five hundredths percent (0.25%);
(4) three-tenths percent (0.3%);
(5) thirty-five hundredths percent (0.35%);
(6) four-tenths percent (0.4%);
(7) forty-five hundredths percent (0.45%); or
(8) five-tenths percent (0.5%);
on the adjusted gross income of county taxpayers.
(c) Except as provided in subsection (h), (i), (j), (k), (l), (m), (n), (o),
(p), or (s), or (v), or (w), the county economic development income tax
rate plus the county adjusted gross income tax rate, if any, that are in
effect on January 1 of a year may not exceed one and twenty-five
hundredths percent (1.25%). Except as provided in subsection (g), (p),
(r), (t), or (u), or (w), the county economic development tax rate plus
the county option income tax rate, if any, that are in effect on January
1 of a year may not exceed one percent (1%).
(d) To impose, increase, decrease, or rescind the county economic
development income tax, the appropriate body must, after January 1 but
before April 1 of a year, adopt an ordinance. The ordinance to impose
the tax must substantially state the following:
"The ________ County _________ imposes the county economic
development income tax on the county taxpayers of _________
County. The county economic development income tax is imposed at
a rate of _________ percent (____%) on the county taxpayers of the
county. This tax takes effect July 1 of this year.".
(e) Any ordinance adopted under this chapter takes effect July 1 of
the year the ordinance is adopted.
(f) The auditor of a county shall record all votes taken on ordinances
presented for a vote under the authority of this chapter and shall, not
more than ten (10) days after the vote, send a certified copy of the
results to the commissioner of the department by certified mail.
(g) This subsection applies to a county having a population of more
than one hundred forty-eight thousand (148,000) but less than one
hundred seventy thousand (170,000). Except as provided in subsection
(p), in addition to the rates permitted by subsection (b), the:
(1) county economic development income tax may be imposed at
a rate of:
provided in subsection (p), the county economic development income
tax rate plus the county adjusted gross income tax rate that are in effect
on January 1 of a year may not exceed one and five-tenths percent
(1.5%).
(m) For:
(1) a county having a population of more than one hundred
eighty-two thousand seven hundred ninety (182,790) but less than
two hundred thousand (200,000); or
(2) a county having a population of more than forty-five thousand
(45,000) but less than forty-five thousand nine hundred (45,900);
except as provided in subsection (p), the county economic development
income tax rate plus the county adjusted gross income tax rate that are
in effect on January 1 of a year may not exceed one and five-tenths
percent (1.5%).
(n) For a county having a population of more than six thousand
(6,000) but less than eight thousand (8,000), except as provided in
subsection (p), the county economic development income tax rate plus
the county adjusted gross income tax rate that are in effect on January
1 of a year may not exceed one and five-tenths percent (1.5%).
(o) This subsection applies to a county having a population of more
than thirty-nine thousand (39,000) but less than thirty-nine thousand six
hundred (39,600). Except as provided in subsection (p), in addition to
the rates permitted under subsection (b):
(1) the county economic development income tax may be imposed
at a rate of twenty-five hundredths percent (0.25%); and
(2) the sum of the county economic development income tax rate
and:
(A) the county adjusted gross income tax rate that are in effect
on January 1 of a year may not exceed one and five-tenths
percent (1.5%); or
(B) the county option income tax rate that are in effect on
January 1 of a year may not exceed one and twenty-five
hundredths percent (1.25%);
if the county council makes a determination to impose rates under this
subsection and section 24 of this chapter.
(p) In addition:
(1) the county economic development income tax may be imposed
at a rate that exceeds by not more than twenty-five hundredths
percent (0.25%) the maximum rate that would otherwise apply
under this section; and
(2) the:
(A) county economic development income tax; and
subsection (p), the sum of the county economic development income
tax rate and the county option income tax rate that are in effect on
January 1 of a year may not exceed one and twenty-five hundredths
percent (1.25%).
(v) This subsection applies to Jasper County. Except as provided in
subsection (p), the sum of the county economic development income tax
rate and the county adjusted gross income tax rate that are in effect on
January 1 of a year may not exceed one and five-tenths percent (1.5%).
(w) An additional county economic development income tax rate
imposed under section 28 of this chapter may not be considered in
calculating any limit under this section on the sum of:
(1) the county economic development income tax rate plus the
county adjusted gross income tax rate; or
(2) the county economic development tax rate plus the county
option income tax rate.
body imposing the tax may adopt an ordinance before July 1 of a year
to provide for the distribution of certified distributions under this
subsection instead of a distribution under subsection (b). The following
apply if an ordinance is adopted under this subsection:
(1) The ordinance is effective January 1 of the following year.
(2) Except as provided in sections 25 and 26 of this chapter, the
amount of the certified distribution that the county and each city
and town in the county is entitled to receive during May and
November of each year equals the product of:
(A) the amount of the certified distribution for the month;
multiplied by
(B) a fraction. For a city or town, the numerator of the fraction
equals the population of the city or the town. For a county, the
numerator of the fraction equals the population of the part of
the county that is not located in a city or town. The
denominator of the fraction equals the sum of the population
of all cities and towns located in the county and the population
of the part of the county that is not located in a city or town.
(3) The ordinance may be made irrevocable for the duration of
specified lease rental or debt service payments.
(d) The body imposing the tax may not adopt an ordinance under
subsection (c) if, before the adoption of the proposed ordinance, any of
the following have pledged the county economic development income
tax for any purpose permitted by IC 5-1-14 or any other statute:
(1) The county.
(2) A city or town in the county.
(3) A commission, a board, a department, or an authority that is
authorized by statute to pledge the county economic development
income tax.
(e) The department of local government finance shall provide each
county auditor with the fractional amount of the certified distribution
that the county and each city or town in the county is entitled to receive
under this section.
(f) Money received by a county, city, or town under this section
shall be deposited in the unit's economic development income tax fund.
(g) Except as provided in subsection (b)(2)(B), in determining the
fractional amount of the certified distribution the county and its cities
and towns are entitled to receive under subsection (b) during a calendar
year, the department of local government finance shall consider only
property taxes imposed on tangible property subject to assessment in
that county.
(h) In a county having a consolidated city, only the consolidated city
is entitled to the certified distribution, subject to the requirements of
sections 15, 25, and 26 of this chapter.
of the tax revenue that results from the additional tax shall be
distributed to the county treasurer from the account established
for the county under this chapter according to the following
schedule during the eighteen (18) month period beginning on July
1 of the year in which the county adopts the ordinance to impose
the additional tax:
(1) One-fourth (1/4) on October 1 of the year in which the
ordinance to impose the additional tax is adopted.
(2) One-fourth (1/4) on January 1 of the calendar year
following the year in which the ordinance to impose the
additional tax is adopted.
(3) One-fourth (1/4) on May 1 of the calendar year following
the year in which the ordinance to impose the additional tax
is adopted.
(4) One-fourth (1/4) on November 1 of the calendar year
following the year in which the ordinance to impose the
additional tax is adopted.
this chapter in the economic growth regions of Indiana.
(b) The provisions of section 3 of this chapter govern the
establishment of a development authority.
Sec. 2. A development authority established under this chapter
is a separate body corporate and politic that shall carry out the
purposes of this article by:
(1) acquiring, constructing, equipping, owning, leasing, and
financing projects and facilities for lease to or for the benefit
of eligible political subdivisions under this article; and
(2) funding and developing:
(A) airport authority projects;
(B) commuter transportation district and other rail
projects and services;
(C) regional transportation authority projects and
services;
(D) economic development projects;
(E) intermodal transportation projects; and
(F) regional trail or greenway projects;
that are of regional importance.
Sec. 3. (a) Subject to the provisions of this article, regional
development authorities may be established under subsection (b),
(c), or (d).
(b) A development authority may be established by two (2) or
more counties that are located in the same economic growth region.
(c) A development authority may be established by:
(1) two (2) or more counties that are located in the same
economic growth region; and
(2) one (1) or more counties that:
(A) are not located in the same economic growth region as
the counties described in subdivision (1); and
(B) are adjacent to the economic growth region containing
the counties described in subdivision (1).
(d) A development authority may be established by:
(1) one (1) or more counties; and
(2) one (1) or more second class cities that:
(A) are not located in the county or counties described in
subdivision (1); and
(B) are located in the same economic growth region as the
county or counties described in subdivision (1).
(e) A county or second class city may participate in the
establishment of a development authority under this section and
become a member of the development authority only if the fiscal
body of the county or second class city adopts an ordinance
authorizing the county or second class city to participate in the
establishment of the development authority.
(f) A county may be a member of a development authority only
if the county is contiguous to at least one (1) other county that is a
member of the development authority. A second class city may be
a member of a development authority only if the county in which
the second class city is located is contiguous to at least one (1) other
county that is a member of the development authority.
(g) Notwithstanding any other provision, if a county becomes a
member of a development authority, each municipality in the
county also becomes a member of the development authority.
(h) Not more than two (2) development authorities may be
established in a particular economic growth region. For purposes
of this subsection, a development authority is considered to be
established in a particular economic growth region if a county or
municipality located in the economic growth region is a member of
a development authority.
(i) A county or municipality may be a member of only one (1)
development authority.
(j) A county or municipality that is a member of the northwest
Indiana regional development authority under IC 36-7.5 may not
be a member of a development authority under this article.
Sec. 4. (a) A county or second class city that:
(1) is not a member of a development authority; and
(2) was eligible to participate in the establishment of a
particular development authority established under this
article;
may join that development authority under this section.
(b) A county or second class city described in subsection (a) may
join a development authority under this section only if:
(1) the fiscal body of the county or second class city adopts an
ordinance authorizing the county or second class city to
become a member of the development authority; and
(2) after the fiscal body adopts an ordinance under
subdivision (1), the development board of the development
authority adopts a resolution authorizing the county or second
class city to become a member of the development authority.
(c) A county or second class city becomes a member of a
development authority on January 1 of the year following the year
in which the development board adopts a resolution under
subsection (b)(2) authorizing the county or second class city to
become a member of the development authority.
(d) The executive of a county or second class city that becomes
a member of a development authority under this section is entitled
to appoint a member to the development board under section 7 of
this chapter.
(e) A county or second class city may not join a development
authority under this section if joining the development authority
would violate the requirement in section 3(i) of this chapter that
not more than two (2) development authorities may be established
in a particular economic growth region.
(f) If a county joins a development authority under this section,
each municipality in the county also becomes a member of the
development authority.
Sec. 5. (a) This section applies to the following:
(1) A county that participates in the establishment of a
development authority under section 3 of this chapter or that
joins a development authority under section 4 of this chapter.
(2) A second class city that participates in the establishment
of a development authority under section 3(d) of this chapter
or that joins a development authority under section 4 of this
chapter.
(b) A county or second class city described in subsection (a) shall
be a member of the development authority for five (5) years after
the date the county or second class city becomes a member of the
development authority.
(c) At least twelve (12) months and not more than eighteen (18)
months before the end of a five (5) year period under subsection
(b), the fiscal body of the county or second class city described in
subsection (a) must adopt a resolution that:
(1) commits the county or second class city to an additional
five (5) years as a member of the development authority,
beginning at the end of the current five (5) year period; or
(2) withdraws the county or second class city from
membership in the development authority not earlier than the
end of the current five (5) year period.
(d) The fiscal body of a county or second class city described in
subsection (a) must adopt a resolution under subsection (c) during
each five (5) year period in which the county or second class city is
a member of the development authority.
(e) A county or second class city described in subsection (a) may
withdraw from a development authority as provided in this section
without the approval of the development board.
of a development board may call a special meeting of the
development board.
(c) A majority of the appointed members of a development
board constitutes a quorum.
(d) The affirmative votes of at least a majority of the appointed
members of a development board are necessary to authorize any
action of the development authority.
Sec. 12. A development board may adopt the bylaws and rules
that the development board considers necessary for the proper
conduct of the development board's duties and the safeguarding of
the development authority's funds and property.
Sec. 13. (a) A development authority shall comply with
IC 5-16-7 (common construction wage), IC 5-22 (public
purchasing), IC 36-1-12 (public work projects), and any applicable
federal bidding statutes and regulations. An eligible political
subdivision that receives a loan, a grant, or other financial
assistance from a development authority or enters into a lease with
a development authority must comply with applicable federal,
state, and local public purchasing and bidding laws and
regulations. However, a purchasing agency (as defined in
IC 5-22-2-25) of an eligible political subdivision may:
(1) assign or sell a lease for property to a development
authority; or
(2) enter into a lease for property with a development
authority;
at any price and under any other terms and conditions as may be
determined by the eligible political subdivision and the
development authority. However, before making an assignment or
a sale of a lease or entering into a lease under this section that
would otherwise be subject to IC 5-22, the eligible political
subdivision or its purchasing agent must obtain or cause to be
obtained a purchase price for the property to be subject to the lease
from the lowest responsible and responsive bidder in accordance
with the requirements for the purchase of supplies under IC 5-22.
(b) In addition to the provisions of subsection (a), with respect
to projects undertaken by a development authority, the
development authority shall set a goal for participation by minority
business enterprises and women's business enterprises. The goals
must be consistent with:
(1) the participation goals established by the counties and
municipalities that are members of the development
authority; and
(2) the goals of delivering the project on time and within the
budgeted amount and, insofar as possible, using Indiana
businesses for employees, goods, and services.
Sec. 14. (a) The office of management and budget shall contract
with a certified public accountant for an annual financial audit of
each development authority. The certified public accountant may
not have a significant financial interest, as determined by the office
of management and budget, in a project, facility, or service funded
by or leased by or to any development authority.
(b) The certified public accountant shall present an audit report
not later than four (4) months after the end of each calendar year
and shall make recommendations to improve the efficiency of
development authority operations. The certified public accountant
shall also perform a study and evaluation of internal accounting
controls and shall express an opinion on the controls that were in
effect during the audit period.
(c) A development authority shall pay the cost of the annual
financial audit under subsection (a). In addition, the state board of
accounts may at any time conduct an audit of any phase of the
operations of a development authority. A development authority
shall pay the cost of any audit by the state board of accounts.
Sec. 15. Each county or municipality that is member of a
development authority may appoint a local advisory committee to
advise the county or municipality on issues related to the
development authority.
Chapter 3. Development Authority Powers and Duties
Sec. 1. A development authority shall do the following:
(1) Assist in the coordination of local efforts concerning
projects that are of regional importance.
(2) Assist a county, a municipality, a commuter transportation
district, an airport authority, and a regional transportation
authority in coordinating regional transportation and
economic development efforts.
(3) Fund projects that are of regional importance, as provided
in this article.
Sec. 2. (a) A development authority may do any of the following:
(1) Finance, improve, construct, reconstruct, renovate,
purchase, lease, acquire, and equip land and projects that are
of regional importance.
(2) Lease land or a project to an eligible political subdivision.
(3) Finance and construct additional improvements to
projects or other capital improvements owned by the
development authority and lease them to or for the benefit of
an eligible political subdivision.
(4) Construct or reconstruct highways, roads, and bridges.
(5) Acquire land or all or a part of one (1) or more projects
from an eligible political subdivision by purchase or lease and
lease the land or projects back to the eligible political
subdivision, with any additional improvements that may be
made to the land or projects.
(6) Acquire all or a part of one (1) or more projects from an
eligible political subdivision by purchase or lease to fund or
refund indebtedness incurred on account of the projects to
enable the eligible political subdivision to make a savings in
debt service obligations or lease rental obligations or to obtain
relief from covenants that the eligible political subdivision
considers to be unduly burdensome.
(7) Make loans, loan guarantees, and grants or provide other
financial assistance to or on behalf of the following:
(A) A commuter transportation district.
(B) An airport authority.
(C) A regional transportation authority. A loan, a loan
guarantee, a grant, or other financial assistance under this
clause may be used by a regional transportation authority
for acquiring, improving, operating, maintaining,
financing, and supporting the following:
(i) Bus services (including fixed route services and
flexible or demand-responsive services) that are a
component of a public transportation system.
(ii) Bus terminals, stations, or facilities or other regional
bus authority projects.
(D) A county.
(E) A municipality.
(8) Provide funding to assist a railroad that is providing
commuter transportation services in a county containing
territory included in the development authority.
(9) Provide funding to assist an airport authority located in a
county containing territory included in the development
authority in the construction, reconstruction, renovation,
purchase, lease, acquisition, and equipping of an airport
facility or airport project.
(10) Provide funding for intermodal transportation projects
and facilities.
(11) Provide funding for regional trails and greenways.
involved; and
(3) sets out any other facts that the development authority
considers necessary or pertinent.
The resolution is conclusive evidence of the public necessity of the
proposed acquisition.
Sec. 3. A development authority may enter into an agreement
with another development authority or any other entity to:
(1) jointly equip, own, lease, and finance projects and
facilities; or
(2) otherwise carry out the purposes of the development
authority;
in any location.
Sec. 4. A development authority shall before April 1 of each year
issue a report to the legislative council, the budget committee, and
the governor concerning the operations and activities of the
development authority during the preceding calendar year. The
report to the legislative council must be in an electronic format
under IC 5-14-6.
Sec. 5. (a) A development authority shall prepare a
comprehensive strategic development plan that includes detailed
information concerning the following:
(1) The proposed projects to be undertaken or financed by the
development authority.
(2) The following information for each project included under
subdivision (1):
(A) Timeline and budget.
(B) The return on investment.
(C) The projected or expected need for an ongoing subsidy.
(D) Any projected or expected federal matching funds.
(b) The development authority shall, not later than January 1 of
the second year following the year in which the development
authority is established, submit the comprehensive strategic
development plan for review by the budget committee and
approval by the director of the office of management and budget.
Chapter 4. Financing; Issuance of Bonds; Leases
Sec. 1. (a) A development board shall establish and administer
a development authority fund.
(b) A development authority fund consists of the following:
(1) Amounts transferred under section 2 of this chapter by
each county and municipality that is a member of the
development authority.
(2) Appropriations, grants, or other distributions made to the
fund by the state.
(3) Money received from the federal government.
(4) Gifts, contributions, donations, and private grants made
to the fund.
(c) On the date a development authority issues bonds for any
purpose under this article, which are secured in whole or in part by
the development authority fund, the development board shall
establish and administer two (2) accounts within the development
authority fund. The accounts must be the general account and the
lease rental account. After the accounts are established, all money
transferred to the development authority fund under subsection
(b)(1) shall be deposited in the lease rental account and used only
for the payment of or to secure the payment of obligations of an
eligible political subdivision under a lease entered into by the
eligible political subdivision and the development authority under
this chapter. However, any money deposited in the lease rental
account and not used for the purposes of this subsection shall be
returned by the secretary-treasurer of the development authority
to the unit that contributed the money to the development
authority.
(d) Notwithstanding subsection (c), if the amount of all money
transferred to a development authority fund under subsection
(b)(1) for deposit in the lease rental account in any one (1) calendar
year is greater than an amount equal to the product of:
(1) one and twenty-five hundredths (1.25); multiplied by
(2) the total of the highest annual debt service on any bonds
then outstanding to their final maturity date, which have been
issued under this article and are not secured by a lease, plus
the highest annual lease payments on any leases to their final
maturity, which are then in effect under this article;
then all or a part of the excess may instead be deposited in the
general account.
(e) All other money and revenue of a development authority
may be deposited in the general account or the lease rental account
at the discretion of the development board. Money on deposit in the
lease rental account may be used only to make rental payments on
leases entered into by the development authority under this article.
Money on deposit in the general account may be used for any
purpose authorized by this article.
(f) A development authority fund shall be administered by the
development authority that established the development authority
fund.
(g) Money in a development authority fund shall be used by the
development authority to carry out this article and does not revert
to any other fund.
Sec. 2. (a) Beginning January 1 of the year following the year in
which a development authority is established, the fiscal officer of
each county and each municipality that is a member of the
development authority shall transfer the amount determined under
subsection (b) to the development authority for deposit in the
development authority fund.
(b) The amount of the transfer required each year by subsection
(a) from each county and each municipality is equal to the amount
that would be distributed to the county or the municipality as
certified distributions of county economic development income tax
revenue raised from a county economic development income tax
rate of five-hundredths of one percent (0.05%) in the county.
(c) Notwithstanding subsection (b), if the additional county
economic development income tax under IC 6-3.5-7-28 is in effect
in a county, the obligations of the county and each municipality in
the county under this section are satisfied by the transfer to the
development fund of all county economic development income tax
revenue derived from the additional tax and deposited in the
county regional development authority fund.
(d) The following apply to the transfers required by this section:
(1) The transfers shall be made without appropriation by the
fiscal body of the county or the fiscal body of the municipality.
(2) Except as provided in subdivision (3), the fiscal officer of
each county and each municipality that is a member of the
development authority shall transfer twenty-five percent
(25%) of the total transfers due for the year before the last
business day of January, April, July, and October of each
year.
(3) County economic development income tax revenue derived
from the additional county economic development income tax
under IC 6-3.5-7-28 must be transferred to the development
fund not more than thirty (30) days after being deposited in
the county regional development fund.
(4) This subdivision does not apply to a county in which the
additional county economic development income tax under
IC 6-3.5-7-28 has been imposed or to any municipality in the
county. The transfers required by this section may be made
from any local revenue (other than property tax revenue) of
the county or municipality, including excise tax revenue,
income tax revenue, local option tax revenue, riverboat tax
revenue, distributions, incentive payments, or money
deposited in the county's or municipality's local major moves
construction fund under IC 8-14-16.
Sec. 3. (a) Subject to subsection (h), a development authority
may issue bonds for the purpose of obtaining money to pay the cost
of:
(1) acquiring real or personal property, including existing
capital improvements;
(2) acquiring, constructing, improving, reconstructing, or
renovating one (1) or more projects; or
(3) funding or refunding bonds issued under this chapter,
IC 8-5-15, IC 8-22-3, IC 36-9-3, or prior law.
(b) The bonds are payable solely from:
(1) the lease rentals from the lease of the projects for which
the bonds were issued, insurance proceeds, and any other
funds pledged or available; and
(2) except as otherwise provided by law, revenue received by
the development authority and amounts deposited in the
development authority fund.
(c) The bonds must be authorized by a resolution of the
development board of the development authority that issues the
bonds.
(d) The terms and form of the bonds must either be set out in
the resolution or in a form of trust indenture approved by the
resolution.
(e) The bonds must mature within forty (40) years.
(f) A development board shall sell the bonds only to the Indiana
bond bank established by IC 5-1.5-2-1 upon the terms determined
by the development board and the Indiana bond bank.
(g) All money received from any bonds issued under this chapter
shall be applied solely to the payment of the cost of acquiring,
constructing, improving, reconstructing, or renovating one (1) or
more projects, or the cost of refunding or refinancing outstanding
bonds, for which the bonds are issued. The cost may include:
(1) planning and development of equipment or a facility and
all buildings, facilities, structures, equipment, and
improvements related to the facility;
(2) acquisition of a site and clearing and preparing the site for
construction;
(3) equipment, facilities, structures, and improvements that
are necessary or desirable to make the project suitable for use
and operations;
(4) architectural, engineering, consultant, and attorney's fees;
(5) incidental expenses in connection with the issuance and
sale of bonds;
(6) reserves for principal and interest;
(7) interest during construction;
(8) financial advisory fees;
(9) insurance during construction;
(10) municipal bond insurance, debt service reserve
insurance, letters of credit, or other credit enhancement; and
(11) in the case of refunding or refinancing, payment of the
principal of, redemption premiums (if any) for, and interest
on the bonds being refunded or refinanced.
(h) A development authority may not issue bonds under this
article unless the development authority first finds that each
contract for the construction of a facility and all buildings,
facilities, structures, and improvements related to that facility to
be financed in whole or in part through the issuance of the bonds
requires payment of the common construction wage required by
IC 5-16-7.
Sec. 4. This chapter contains full and complete authority for the
issuance of bonds. No law, procedure, proceedings, publications,
notices, consents, approvals, orders, or acts by a development
board or any other officer, department, agency, or instrumentality
of the state or of any political subdivision is required to issue any
bonds, except as prescribed in this article.
Sec. 5. (a) A development authority may secure bonds issued
under this chapter by a trust indenture between the development
authority and a corporate trustee, which may be any trust
company or national or state bank in Indiana that has trust
powers.
(b) The trust indenture may:
(1) pledge or assign revenue received by the development
authority, amounts deposited in the development authority
fund, and lease rentals, receipts, and income from leased
projects, but may not mortgage land or projects;
(2) contain reasonable and proper provisions for protecting
and enforcing the rights and remedies of the bondholders,
including covenants setting forth the duties of the
development authority and development board;
(3) set forth the rights and remedies of bondholders and
trustees; and
(4) restrict the individual right of action of bondholders.
(c) Any pledge or assignment made by the development
authority under this section is valid and binding in accordance with
IC 5-1-14-4 from the time that the pledge or assignment is made,
against all persons whether they have notice of the lien or not. Any
trust indenture by which a pledge is created or an assignment made
need not be filed or recorded. The lien is perfected against third
parties in accordance with IC 5-1-14-4.
Sec. 6. (a) Bonds issued under IC 8-5-15, IC 8-22-3, IC 36-9-3,
or prior law may be refunded as provided in this section.
(b) An eligible political subdivision may:
(1) lease all or a part of land or a project or projects to a
development authority, which may be at a nominal lease
rental with a lease back to the eligible political subdivision,
conditioned upon the development authority assuming bonds
issued under IC 8-5-15, IC 8-22-3, IC 36-9-3, or prior law and
issuing its bonds to refund those bonds; and
(2) sell all or a part of land or a project or projects to a
development authority for a price sufficient to provide for the
refunding of those bonds and lease back the land or project or
projects from the development authority.
Sec. 7. (a) Before a lease may be entered into by an eligible
political subdivision under this chapter, the eligible political
subdivision must find that the lease rental provided for is fair and
reasonable.
(b) A lease of land or a project from a development authority to
an eligible political subdivision:
(1) may not have a term exceeding forty (40) years;
(2) may not require payment of lease rentals for a newly
constructed project or for improvements to an existing
project until the project or improvements to the project have
been completed and are ready for occupancy or use;
(3) may contain provisions:
(A) allowing the eligible political subdivision to continue to
operate an existing project until completion of the
acquisition, improvements, reconstruction, or renovation
of that project or any other project; and
(B) requiring payment of lease rentals for land, for an
existing project being used, reconstructed, or renovated, or
for any other existing project;
(4) may contain an option to renew the lease for the same or
a shorter term on the conditions provided in the lease;
(5) must contain an option for the eligible political subdivision
to purchase the project upon the terms stated in the lease
during the term of the lease for a price equal to the amount
required to pay all indebtedness incurred on account of the
project, including indebtedness incurred for the refunding of
that indebtedness;
(6) may be entered into before acquisition or construction of
a project;
(7) may provide that the eligible political subdivision shall
agree to:
(A) pay any taxes and assessments on the project;
(B) maintain insurance on the project for the benefit of the
development authority;
(C) assume responsibility for utilities, repairs, alterations,
and any costs of operation; and
(D) pay a deposit or series of deposits to the development
authority from any funds available to the eligible political
subdivision before the commencement of the lease to
secure the performance of the eligible political
subdivision's obligations under the lease; and
(8) must provide that the lease rental payments by the eligible
political subdivision shall be made from the development
authority fund established under section 1 of this chapter and
may provide that the lease rental payments by the eligible
political subdivision shall be made from:
(A) net revenues of the project;
(B) any other funds available to the eligible political
subdivision; or
(C) both sources described in clauses (A) and (B).
Sec. 8. This chapter contains full and complete authority for
leases between a development authority and an eligible political
subdivision. No law, procedure, proceedings, publications, notices,
consents, approvals, orders, or acts by a development authority or
the eligible political subdivision or any other officer, department,
agency, or instrumentality of the state or any political subdivision
is required to enter into any lease, except as prescribed in this
article.
Sec. 9. If the lease provides for a project or improvements to a
project to be constructed by a development authority, the plans
and specifications shall be submitted to and approved by all
agencies designated by law to pass on plans and specifications for
public buildings.
Sec. 10. A development authority and an eligible political
subdivision may enter into common wall (party wall) agreements
or other agreements concerning easements or licenses. These
agreements shall be recorded with the recorder of the county in
which the project is located.
Sec. 11. (a) An eligible political subdivision may lease for a
nominal lease rental, or sell to a development authority, one (1) or
more projects or parts of a project or land on which a project is
located or is to be constructed.
(b) Any lease of all or a part of a project by an eligible political
subdivision to a development authority must be for a term equal to
the term of the lease of that project back to the eligible political
subdivision.
(c) An eligible political subdivision may sell property to a
development authority for the amount the eligible political
subdivision determines to be in the best interest of the eligible
political subdivision. The development authority may pay that
amount from the proceeds of bonds of the development authority.
Sec. 12. If an eligible political subdivision exercises its option to
purchase leased property, the eligible political subdivision may
issue its bonds as authorized by statute.
Sec. 13. (a) All:
(1) property owned by a development authority;
(2) revenue of a development authority; and
(3) bonds issued by a development authority, the interest on
the bonds, the proceeds received by a holder from the sale of
bonds to the extent of the holder's cost of acquisition,
proceeds received upon redemption before maturity, proceeds
received at maturity, and the receipt of interest in proceeds;
are exempt from taxation in Indiana for all purposes except the
financial institutions tax imposed under IC 6-5.5 or a state
inheritance tax imposed under IC 6-4.1.
(b) All securities issued under this chapter are exempt from the
registration requirements of IC 23-2-1 and other securities
registration statutes.
Sec. 14. Bonds issued under this chapter are legal investments
for private trust funds and the funds of banks, trust companies,
insurance companies, building and loan associates, credit unions,
savings banks, private banks, loan and trust and safe deposit
companies, rural loan and savings associations, guaranty loan and
savings associations, mortgage guaranty companies, small loan
companies, industrial loan and investment companies, and other
financial institutions organized under Indiana law.
Sec. 15. An action to contest the validity of bonds to be issued
under this chapter may not be brought after the time limitations
set forth in IC 5-1-14-13.
Sec. 16. (a) This section applies if:
(1) a county or municipality that is a member of a
development authority fails to make a transfer or a part of a
transfer required by section 2 of this chapter; and
(2) the development authority has bonds or other debt or lease
obligations outstanding.
(b) The treasurer of state shall, notwithstanding IC 6-1.1-21, do
the following:
(1) Reduce the next distribution of property tax replacement
credits under IC 6-1.1-21 to the county or municipality that
failed to make a transfer or part of a transfer and withhold an
amount equal to the amount of the transfer or part of the
transfer under section 2 of this chapter that the unit failed to
make.
(2) Pay the amount withheld under subdivision (1) to the
development authority.
Sec. 17. (a) If there are bonds outstanding that have been issued
under this article by a development authority and are not secured
by a lease, or if there are leases in effect under this article, the
general assembly covenants that it will not reduce the amount
required to be transferred under section 2 of this chapter from a
county or municipality that is a member of a development
authority to the development authority below an amount that
would produce one and twenty-five hundredths (1.25) multiplied
by the total of the highest annual debt service on the bonds to their
final maturity plus the highest annual lease payments on the leases
to their final termination date.
(b) The general assembly also covenants that it will not:
(1) repeal or amend this article in a manner that would
adversely affect owners of outstanding bonds, or the payment
of lease rentals, secured by the amounts pledged under this
chapter; or
(2) in any way impair the rights of owners of bonds of a
development authority, or the owners of bonds secured by
lease rentals, secured by a pledge of revenues under this
chapter;
except as otherwise set forth in subsection (a).