§ 27-1-29-17 — Bonds or notes issued by commission; purposes; status; procedures

Indiana § 27-1-29-17

• Jurisdiction: Indiana
• Title 27: INSURANCE
• Art. 1: DEPARTMENT OF INSURANCE
• Ch. 29: Indiana Political Subdivision Risk Management

Text

(a) As used in this section:
(1) "basic fund" refers to the political subdivision risk
management fund established by this chapter; and
(2) "catastrophic fund" refers to the political subdivision
catastrophic liability fund established by IC 27-1-29.1.
(b) Before July 1, 2005, the commission may issue its bonds or
notes in amounts that it considers necessary to provide funds to:
(1) establish or maintain the reserve account in the catastrophic
fund provided for in IC 27-1-29.1-8;
(2) provide for the payment of liabilities payable out of the basic
fund to the extent such liabilities exceed the money in the basic
fund; and
(3) pay, fund, or refund, regardless of when due, the principal of
or interest or redemption premiums on bonds or notes issued
under subdivision (1) or (2).
Bonds or notes issued under subdivision (2) must mature within three
(3) years after their date of issuance.
(c) The bonds or notes of the commission may be issued and sold by
the commission to the Indiana bond bank under IC 5-1.5.
(d) Every issue of bonds or notes is an obligation of the commission.
An issue of bonds or notes under subsection (b)(1) is payable solely
from assessments imposed by the commission under IC 27-1-29.1 on
political subdivisions that are members of the catastrophic fund, and
the commission may secure such bonds or notes by a pledge of
assessments imposed under IC 27-1-29.1. An issue of bonds or notes
under subsection (b)(2) is payable solely from assessments imposed by
the commission under section 12 of this chapter on political
subdivisions that are members of the basic fund, and the commission
may secure such bonds or notes by a pledge of assessments imposed
under section 12 of this chapter.
(e) A bond or note of the commission:
(1) is not a debt, liability, loan of credit, or pledge of the faith and
credit of the state; and
(2) must contain on its face a statement that the commission is
obligated to pay principal and interest, and the redemption
premium, if any, and that the faith, credit, and taxing power of the
state are not pledged to the payment of the bond or note.
(f) The state pledges to and agrees with the holders of the bonds or
notes issued under this chapter that the state will not:
(1) limit or restrict the rights vested in the commission to fulfill
the terms of any agreement made with the holders of its bonds or
notes; or
(2) in any way impair the rights or remedies of the holders of the
bonds or notes;
until the bonds or notes, together with the interest on the bonds or
notes, and interest on unpaid installments of interest, and all costs and
expenses in connection with an action or proceeding by or on behalf of
the holders, are fully met, paid, and discharged.
(g) The bonds or notes of the commission are negotiable instruments
for all purposes of IC 26-1, subject only to the provisions of the bonds
and notes for registration.
(h) Bonds or notes of the commission must be authorized by
resolution of the commission, may be issued in one (1) or more series,
and must:
(1) bear the date;
(2) mature at the time or times;
(3) be in the denomination;
(4) be in the form;
(5) carry the conversion or registration privileges;
(6) have the rank or priority;
(7) be executed in the manner;
(8) be payable from the sources in the medium of payment at the
place inside or outside the state; and
(9) be subject to the terms of redemption;
as the resolution of the commission or the trust agreement securing the
bonds or notes provides.
(i) Bonds or notes may be issued under this chapter without
obtaining the consent of any agency of the state and without any other
proceeding or condition other than the proceedings or conditions
specified in this chapter.
(j) The rate or rates of interest on the bonds or notes may be fixed
or variable. Variable rates shall be determined in the manner and in
accordance with the procedures set forth in the resolution authorizing
the issuance of the bonds or notes. Bonds or notes bearing a variable
rate of interest may be converted to bonds or notes bearing a fixed rate
or rates of interest, and bonds or notes bearing a fixed rate or rates of
interest may be converted to bonds or notes bearing a variable rate of
interest, to the extent and in the manner set forth in the resolution
pursuant to which the bonds or notes are issued. The interest on bonds
or notes may be payable semiannually or annually or at any other
interval or intervals as may be provided in the resolution, or the interest
may be compounded and paid at maturity or at any other times as may
be specified in the resolution.
(k) The bonds or notes may be made subject, at the option of the
holders, to mandatory redemption by the commission at the times and
under the circumstances set forth in the authorizing resolution.
(l) Bonds or notes of the commission may be sold at public or
private sale at such price, either above or below the principal amount,
as the commission fixes. If bonds or notes of the commission are to be
sold at public sale, the commission shall comply with IC 5-1-11 and
shall publish notice of the sale in accordance with IC 5-3-1-2 in two (2)
newspapers published and of general circulation in Indianapolis.
(m) The commission may periodically issue its notes under this
chapter and pay and retire the principal of the notes, pay the interest
due on the notes, or fund or refund the notes from proceeds of bonds or
of other notes or from other funds or money of the commission
available for that purpose in accordance with a contract between the
commission and the holders of the notes.
(n) The commission may secure any bonds or notes issued under
this chapter by a trust agreement by and between the commission and
a corporate trustee, which may be any trust company or bank having
the powers of a trust company within or outside Indiana.
(o) The trust agreement or the resolution providing for the issuance
of the bonds or notes may contain provisions for protecting and
enforcing the rights and remedies of the holders of any such bonds or
notes as are reasonable and proper and not in violation of law.
(p) The trust agreement or resolution may set forth the rights and
remedies of the holders of any bonds or notes and of the trustee and
may restrict the individual right of action by the holders.
(q) In addition to the provisions of subsections (n) through (p), any
trust agreement or resolution may contain other provisions the
commission considers reasonable and proper for the security of the
holders of any bonds or notes.
(r) All expenses incurred in carrying out the provisions of the trust
agreement or resolution may be paid from assessments, revenues, or
assets pledged or assigned to the payment of the principal of and the
interest on bonds and notes or from any other funds available to the
commission.
(s) Notwithstanding the restrictions of any other law, all financial
institutions, investment companies, insurance companies, insurance
associations, executors, administrators, guardians, trustees, and other
fiduciaries may legally invest sinking funds, money, or other funds
belonging to them or within their control in bonds or notes issued under
this chapter.
(t) All bonds or notes issued under this chapter are issued by a body
corporate and politic of this state, but not a state agency, and for an
essential public and government purpose and the bonds and notes, the
interest thereon, the proceeds received by a holder from the sale of the
bonds or notes to the extent of the holder's cost of acquisition, proceeds
received upon redemption before maturity, and proceeds received at
maturity, and the receipt of the interest and proceeds are exempt from
taxation in Indiana for all purposes except the financial institutions tax
imposed under IC 6-5.5.

Legislative History

As added by P.L.272-1987, SEC.6. Amended by P.L.21-1990, SEC.52; P.L.254-1997(ss), SEC.25; P.L.235-2005, SEC.203; P.L.79-2017, SEC.70.