Indiana Code Title 36. Local Government § 36-9-23-17

Sec. 17. (a) This chapter does not authorize a municipality to make any contract or to incur any obligation that is not payable solely from money provided under this chapter.

(b) Money for the costs of the sewage works or any improvement of the works may be provided only:

(c) A municipality obtaining a loan from the federal government or a federal agency may issue its obligations under this chapter to the federal government or federal agency to evidence its indebtedness.  The obligations are not a corporate indebtedness of the municipality, are payable solely from the revenues of the sewage works, and may be made of equal priority or subordinate to any other revenue bonds issued or to be issued under this chapter.

(d) Notwithstanding subsection (b), money to finance the construction of any of the self-liquidating works authorized by this chapter may be obtained from any state or federal agency.

(e) Notwithstanding subsection (b), any industrial cost recovery received by the municipality and required to be paid by industrial users under the terms of a federal grant are not considered revenues under this chapter.  The municipal legislative body may use industrial cost recovery grants as provided by the terms of federal grants.