Sec. 58. (a) Upon receiving notice from the bond bank that the corporation has failed to pay when due the principal of or interest on the obligations of the corporation then held, owned by, or arising from an agreement with the bond bank, the controller of the county in which the corporation is established shall do the following:

(1) Reduce the amount of any revenues, other money, or property that are pledged to pay the obligations, that:

(A) are held, possessed, maintained, controlled, or otherwise in the custody of the county in which the corporation is established or a department, an agency, or an instrumentality of the county in which the corporation is established; and

(B) would otherwise be available for distribution to the corporation under any other law;

by an amount equal to the amount of the unpaid obligations.

(2) Pay the amount by which the revenues, other money, or property that are pledged to pay the obligations is reduced under subdivision (1) to the bond bank to pay the principal of and interest on the bonds or other obligations of the bond bank directly related to the applicable defaulted obligations of the corporation.

(3) Notify the corporation that the revenues, other money, or property, which would otherwise be available for distribution to the corporation, has been reduced by an amount necessary to satisfy all or part of the unpaid obligations to the bond bank.

(b) Any reductions under subsection (a) must be used only for the purpose of paying the principal of and interest on the bonds or other obligations of the bond bank that are directly related to the applicable defaulted obligations of the corporation and that the bond bank has failed to pay and for no other purpose.

(c) Notwithstanding any other law, the corporation has no legal or equitable right to any revenues, other money, or property that are pledged to pay the principal of and interest on the bonds or other obligations of the bond bank, which are held, possessed, maintained, controlled or otherwise in the custody of any other political subdivision of the state, or any department, agency, or instrumentality of a political subdivision of the state, that would otherwise be available for distribution to the political subdivision, until:

(1) any reduction permitted under this section has been applied; and

(2) the revenues, other money, or property have been or are required to be distributed to and received by the corporation.

(d) This section shall be interpreted liberally so that the county, in which the corporation is established, shall, to the extent permitted under Indiana law, ensure that the obligations of the corporation held or owned by or arising from an agreement with the bond bank, are paid when due. However, this section does not create a debt of the state or any other political subdivision.

(e) The withholding of a payment from or the reduction of a payment to the corporation and the payment to the bond bank under this section must not adversely affect the validity of the obligation of the corporation in default.

As added by P.L.189-2018, SEC.148.