Sec. 7. (a) As used in this section, “check” includes electronic transfer by wire transfer or other similar means.

     (b) A state educational institution may not:

(1) accept a bid for the bonds, other than a bid submitted by the federal government or any agency of the federal government; or

(2) execute and deliver a contract of sale for the bonds;

unless the bid or contract is accompanied by a certified check or cashier’s check in an amount equal to one percent (1%) of the principal amount of the bonds sold.

     (c) The check required by subsection (b) must be:

(1) payable to the state educational institution issuing the bonds; and

(2) drawn on a bank or trust company, in or out of state, that is insured by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation.

     (d) The state educational institution shall:

(1) hold the check required by subsection (b) as a guaranty of the performance of:

(A) the bid, if the bid is accepted; or

(B) the contract, if the contract is signed; and

(2) return the check required under subsection (b) to a bidder if that bidder’s bid is not accepted.

     (e) If a bid is accepted and the bidder fails to perform the bid, the check required under subsection (b) and the proceeds of the check are:

(1) the property of the state educational institution; and

(2) considered liquidated damages to the state educational institution arising from the default.

     (f) A contract for the purchase of bonds at negotiated sale must provide that if the purchaser fails to perform the purchaser’s obligation to pay for the bonds, the check required under subsection (b) and the proceeds from the check are:

(1) the property of the state university or college; and

(2) considered liquidated damages to the state educational institution arising from the default.

[Pre-2007 Higher Education Recodification Citation: 4-1-5-2.]

As added by P.L.2-2007, SEC.273. Amended by P.L.79-2010, SEC.3.