§ 8-22-3-18.1 — Capital improvements; revenue bond issues and related matters

Indiana § 8-22-3-18.1

• Jurisdiction: Indiana
• Art. 22: AIRPORTS
• Ch. 3: Local Airport Authorities

Text

1. (a) The board may:
(1) finance capital improvements, including the acquisition of real
estate;
(2) refund any bonds; or
(3) pay any loan contract;
by borrowing money and issuing revenue bonds from time to time
under this section.
(b) The issuance of revenue bonds must be authorized by ordinance
of the board in at least one (1) series, may bear a date or dates, may
mature at a time or times not exceeding forty (40) years from their
respective dates, may bear interest, may be in a denomination or
denominations, may be in a form, either coupon or registered, may
carry registration and conversion privileges, may be executed in a
manner, may be payable in a medium of payment and at a place or
places, may be subject to terms of redemption, with or without a
premium, may be declared or become due before the maturity date,
may provide for the replacement of mutilated, destroyed, stolen, or lost
bonds, may be authenticated in a manner and upon compliance with
conditions, and may contain other terms and covenants that the
ordinance of the board provides. Notwithstanding the form or tenor of
the bonds, and in the absence of express recitals on their faces that the
bonds are nonnegotiable, the bonds are negotiable instruments.
(c) The issuance of revenue bonds must be approved as follows:
(1) When the authority is established by an eligible entity, by the
entity's executive.
(2) When the authority is established by at least two (2) eligible
entities acting jointly, by the executive of each of those entities.
(3) When the authority was established under IC 19-6-2 (before
its repeal on April 1, 1980), by the executive of the consolidated
city.
(4) When the authority was established under IC 19-6-3 (before
its repeal on April 1, 1980), by the county fiscal body.
For purposes of this subsection, the entire legislative body of a town is
considered the executive of the town.
(d) The bonds must be executed in the name of the authority by the
president of the board and attested by the secretary, and interest
coupons may be executed by placing on the interest coupons the
facsimile signature of the president of the board. The bonds are valid
and binding obligations of the authority for all purposes,
notwithstanding that before delivery of the bonds any of the persons
whose signatures appear on the bonds have ceased to be officers of the
entity or authority, as if the persons had continued to be officers of the
entity and authority until after delivery. The validity of the
authorization and issuance of the bonds is not dependent on or affected
in any way by proceedings taken for the improvement for which the
bonds are to be issued, or by contracts made in connection with the
improvement. An ordinance authorizing revenue bonds must provide
that a revenue bond contain a recital that the bond is issued under this
chapter, and a bond containing the recital under authority of an
ordinance is considered valid and issued in conformity with this
chapter.
(e) At the discretion of the board, the revenue bonds shall be sold
either under the procedures for selling public bonds or at a negotiated
sale. The bonds may be sold in installments at different times, or an
entire issue or series may be sold or exchanged at one (1) time. Any
issue or series of the bond may be sold in part or sold in part in
installments at different times or at one (1) time.
(f) The bonds are special obligations of the authority and are
payable solely from and secured by a lien upon the revenues of all or
part of the facilities of the authority, as shall be more fully described in
the ordinance of the board authorizing the issuance of the bonds, and,
subject to the Constitution and to the prior or superior rights of any
person, the board may by ordinance pledge and assign for the security
of the bonds all or part of the gross or net revenues of the enterprise.
(g) All bonds of the same issue shall be equally and ratably secured,
without priority by reason of number, date of bonds, of sale, of
execution, or of delivery, by a lien upon the revenues in accordance
with this section and the ordinance authorizing the issuance of the
bonds.
(h) This chapter does not alter the rights granted to or the
agreements made with the holders of any notes, bonds, or other
obligations of the board outstanding on April 1, 1980.
(i) The bonds, and interest on the bonds, are not a debt of the
authority or the board, nor a charge, a lien, or an encumbrance, legal or
equitable, upon property of the board, or upon income, receipts, or
revenues of the board other than those revenues of the facilities that
have been pledged to the payment of the bonds. Every bond must recite
in substance that the bond, including interest, is payable solely from the
revenues pledged to the bond's payment, and that the board is under no
obligation to pay the bond, except from those revenues.
(j) The bonds and the income from the bonds are exempt from
taxation, except the financial institutions tax imposed under IC 6-5.5.
(k) In order that the payment of the revenue bonds and the interest
on the bonds be adequately secured, the board and its officers, agents,
and employees shall:
(1) pay or cause to be paid punctually the principal of every bond,
and the interest on every bond, on the date or dates and at the
place or places and in the manner and out of the funds mentioned
in the bonds and in the attached coupons, in accordance with the
ordinance authorizing their issuance;
(2) operate the facilities of the authority, the revenues of which
are pledged to the bonds, in an efficient and economical manner
and establish, levy, maintain, and collect fees, tolls, rentals, rates,
and other charges that may be necessary or proper, which must be
at least sufficient after making due and reasonable allowance for
contingencies and for a margin of error in the estimates:
(A) to pay all current expenses of operation, maintenance, and
repair of the facilities;
(B) to pay the interest on and principal of the bonds as the
bonds become due and payable;
(C) to comply in all respects with the terms of the ordinance
authorizing the issuance of bonds or any other contract or
agreement with the holders of the bonds; and
(D) to meet any other obligations of the board that are charges,
liens, or encumbrances upon the revenues of the facilities;
(3) operate and maintain the facilities and every part of the
facilities in good working order and condition;
(4) preserve the security of the bonds and the rights of the holders,
and warrant and defend the rights against all claims and demands
of all persons;
(5) pay the lawful claims for labor, materials, and supplies, which,
if unpaid, might by law become a lien or charge upon the
revenues or part of the revenues, superior to the lien of the bonds,
or that might impair the security of the bonds, to the end that the
priority and security of the bonds be fully preserved;
(6) hold in trust the revenues pledged to the payment of the bonds
for the benefit of the holders of the bonds and apply the revenues
only as provided by the ordinance authorizing the issuance of the
bonds or, if the ordinance is modified, as provided in the
ordinance as modified; and
(7) keep proper books of record and accounts of the facilities
(separate from all other records and accounts) in which complete
and correct entries are made of all transactions relating to the
facilities or part of the facilities, the revenues of which are
pledged and that, together with all other books and papers of the
board, are at all times subject to the inspection of the holder or
holders of not less than ten percent (10%) of the bonds then
outstanding or the holder's or the holders' representative duly
authorized in writing.
None of the duties in this subsection require the expenditure in any
manner or for any purpose by the board of any funds other than
revenues received or receivable from the enterprise or facilities.
(l) The board may insert provisions in an ordinance or a resolution
authorizing the issuance of revenue bonds, which becomes a part of the
contract with the holders of the revenue bonds, as to:
(1) limitations on the purpose to which the proceeds of sale of any
issue of revenue bonds, or any notes, bonds, or other obligations
payable from the revenues to finance the improving of the
facilities may be applied;
(2) limitations on the issuance of additional bonds, or additional
notes, bonds, or other obligations to finance the improving of the
facilities, including liens;
(3) limitations on the right of the board to restrict and regulate the
use of the facilities;
(4) the amount and kind of insurance to be maintained on the
facilities and the use and disposition of insurance money;
(5) pledging all or part of the revenues of the facilities to which
the board's right exists;
(6) covenanting against pledging all or part of the revenues of the
facilities to which its right exists;
(7) events of default and terms and conditions upon which the
bonds become or may be declared due before maturity and as to
the terms and conditions upon which declaration and its
consequences may be waived;
(8) the rights, liabilities, powers, and duties arising upon the
breach by it of any covenants, conditions, or obligations;
(9) the vesting in a trust or trustees the right to enforce covenants
made to secure, to pay, or in relation to the bonds, as to the
powers and duties of the trustee or trustees, and the limitation of
liabilities, and as to the terms and conditions upon which the
holders of the bonds or any proportion or percentage of the
holders of the bonds may enforce any covenants made or duties
imposed under this chapter;
(10) a procedure by which the terms of an ordinance authorizing
revenue bonds, or any other contract with bondholders, such as an
indenture of trust or similar instrument, may be amended or
abrogated and as to the amount of bonds, the holders of which
must consent to them and the manner in which such consent may
be given;
(11) the execution of all instruments necessary or convenient in
the exercise of the powers granted by this chapter or in the
performance of the duties of the board and the officers, agents,
and employees of them;
(12) refraining from pledging, claiming, or taking the benefit or
advantage of any stay or extension law whenever enacted, which
may affect the duties or covenants of the board in relation to the
bonds, or the performance or the lien of the bonds;
(13) the purchase out of funds available, including the proceeds
of revenue bonds, of outstanding notes, bonds, or obligations and
the price or prices at which and the manner in which purchases
may be made; and
(14) other acts and things that may be necessary, convenient, or
desirable in order to secure the bonds, or that may tend to make
the bonds more marketable.
This section does not authorize the board to make covenants, to
perform an act, or to do anything that requires the expenditure by the
board of funds other than revenues received or receivable from the
facilities.
(m) In the event that the board defaults in the payment of the
principal or interest on any of the revenue bonds after the bonds
become due, whether at maturity or upon call for redemption, and the
default continues for a period of thirty (30) days, or in the event that the
board or the board's officers, agents, or employees fail or refuse to
comply with this chapter or default in an agreement made with the
holders of the bonds, any holder or holders of revenue bonds, or a
trustee for the holder or holders of the bonds, has the right to apply in
an appropriate judicial proceeding to the circuit or superior court of the
county in which the district is situated, in which the facilities are
located, or in any court of competent jurisdiction, for the appointment
of a receiver of the facilities, whether or not the holder, holders, or
trustee is seeking or has sought to enforce any other right or to exercise
any remedy in connection with the bonds. Upon application, the circuit
or superior court may appoint, and if the application is made by the
holders of twenty-five percent (25%) in principal amount of the bonds
then outstanding or by a trustee for holders of the bonds in that amount
shall appoint, a receiver for the enterprise.
(n) The receiver appointed shall, directly or by the receiver's agents
and attorneys, enter into and upon and take possession of the facilities,
the revenues of which are pledged, and every part of the facilities, and
may exclude the board, the board's officers, agents, and employees, and
all persons claiming under them. The receiver may have, hold, use,
operate, manage, and control the facilities in the name of the board or
otherwise, as the receiver considers best, and may exercise all rights
and powers of the board with respect to the facilities as the board itself
might do. The receiver shall maintain, restore, and insure the facilities,
shall make all necessary repairs, shall establish, levy, maintain, and
collect fees, tolls, rentals, and other charges in connection with the
facilities that the receiver considers necessary or proper and
reasonable, and shall collect and receive all revenues, deposit the
revenues in a separate account, and apply the revenues in the manner
that the court directs.
(o) Whenever all that is due upon the revenue bonds and interest on
the bonds, and upon other notes, bonds, or other obligations, and
interest on the notes, bonds, or obligations, having a charge, lien, or
encumbrance on the revenues of the facilities and under the terms of
covenants or agreements with bondholders has been paid or deposited,
and all defaults have been cured and made good, the court may in its
discretion, and after notice and hearing that the court considers
reasonable and proper, direct the receiver to surrender possession of
the facilities to the board, with the right of the holders of the bonds to
secure the appointment of a receiver upon subsequent default
remaining in force.
(p) The receiver shall act under the direction and supervision of the
court making the appointment and is at all times subject to the orders
and decrees of the court, including possible removal. Nothing
contained in this section limits or restricts the jurisdiction of the court
to enter other or further orders and decrees as the court considers
necessary or appropriate for the exercise by the receiver of functions
specifically set forth.
(q) Subject to contractual limitations binding upon the holders or a
trustee of an issue of revenue bonds, including but not limited to the
restrictions of the exercise of a remedy to a specified proportion or
percentage of the holders, a holder or trustee of the bonds may, for the
equal benefit and protection of all holders of revenue bonds similarly
situated:
(1) by mandamus or other suit, action, or proceeding at law or in
equity enforce rights against the board and any of the board's
officers, agents, and employees and require and compel the board
or the board's officers, agents, or employees to perform and carry
out duties and obligations under this chapter and covenant
agreements with bondholders;
(2) by action or suit in equity require the board to account as if the
board were the trustee of an express trust;
(3) by action or suit in equity enjoin any acts or things that may be
unlawful or in violation of the rights of the bondholders; or
(4) bring suit upon the bonds.
No remedy conferred by this chapter upon a holder or trustee of
revenue bonds is intended to be exclusive of any other remedy, but
each remedy is in addition to every other remedy and may be exercised
without exhausting and without regard to any other remedy conferred
by this chapter or by any other law. No waiver of a default or breach of
duty or contract, whether by a holder or trustee of revenue bonds
extends to or affects a subsequent default or breach of duty or contract
or impairs any rights or remedies on them. No delay or omission of a
bondholder or trustee extends to or affects a subsequent default or
breach of duty or contract or impairs any rights or remedies. No delay
or omission of a bondholder or trustee to exercise a right or power
accruing upon default impairs the right or power or may be construed
to be a waiver of the default or acquiescence in it. Every substantive
right and every remedy conferred upon the holders of revenue bonds
may be enforced and exercised from time to time and as often as is
expedient. In case any suit, action, or proceeding to enforce a right or
exercise a remedy is brought or taken and then discontinued or
abandoned, or is determined adversely to the holder or trustee of the
revenue bonds, then the board and the holder or trustee shall be
restored to their former positions and rights and remedies as if no suit,
action, or proceeding had been brought or taken.
(r) Refunding or refunding and improvement revenue bonds may be
issued in accordance with the provisions for the refinancing or
refinancing and improving of any of the facilities for which revenue
bonds or a loan contract have been issued or made under this section
or section 19 of this chapter.
(s) This section constitutes full authority for the issuance of revenue
bonds. No procedure, proceedings, publications, notices, consents,
approvals, orders, acts, or things by the board, by a board, an officer,
a commission, a department, an agency, or an instrumentality of the
state, or by an eligible entity is required to issue revenue bonds or to do
any act or perform anything under this chapter, except as presented by
this chapter. The powers conferred by this chapter are in addition to,
and not in substitution for, and the limitations imposed by this section
do not affect the powers conferred in another section of this chapter or
by any other statute.

Legislative History

As added by P.L.1-1991, SEC.81. Amended by P.L.254-1997(ss), SEC.17; P.L.79-2017, SEC.58.