Bill Text: IN HB1192 | 2012 | Regular Session | Enrolled
Bill Title: School corporation and local government finances.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Enrolled - Dead) 2012-03-19 - Signed by the Governor [HB1192 Detail]
Download: Indiana-2012-HB1192-Enrolled.html
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or
AN ACT to amend the Indiana Code concerning taxation.
Be it enacted by the General Assembly of the State of Indiana:
(b) As used in this section, "increment" means the annual difference between:
(1) the annual debt service payment for the bonds proposed to be retired or refunded; and
(2) the annual debt service payment for the proposed refunding bonds;
for each year that the bonds that are being retired or refunded would have been outstanding.
(c) In order for a school corporation to be an eligible school corporation under this section, the school corporation must determine that the percentage computed under this subsection for the school corporation is at least twenty percent (20%) before January 1, 2014, or at least thirty percent (30%) after December 31, 2013, regarding the year for which the latest certified levies have been determined. A school corporation shall compute its percentage as follows:
(1) Compute the amount of credits granted under IC 6-1.1-20.6
against the school corporation's combined levy for the school
corporation's:
(A) debt service fund, as described in IC 20-46-7-15;
(B) capital projects fund;
(C) transportation fund;
(D) school bus replacement fund; and
(E) racial balance fund.
(2) Compute the school corporation's combined levy for the
school corporation's:
(A) capital projects fund;
(B) transportation fund;
(C) school bus replacement fund; and
(D) racial balance fund.
(3) Divide the amount computed under subdivision (1) by the
amount computed under subdivision (2) and express it as a
percentage.
A school corporation that desires to be an eligible school
corporation under this section must submit a written request for
a certification by the department of local government finance that
the computation of the school corporation's percentage computed
under this subsection is correct. The department of local
government finance shall, not later than ten (10) working days
after the date the department receives the school corporation's
request, certify the percentage computed under this subsection for
the school corporation.
(d) A school corporation that desires to be an eligible school
corporation under this section must satisfy the following conditions:
(1) The school corporation shall conduct a public hearing and
provide notice of the time, date, and place of the hearing,
published as required by IC 5-3-1, before the school corporation
may adopt an ordinance a resolution under this section. At the
public hearing, the governing body must provide the following
information:
(A) The annual debt service payments, applicable debt service
tax rate, and total debt service payments for the bonds
proposed to be retired or refunded.
(B) The annual debt service payments, applicable debt service
fund tax rate, and total debt service payments for the proposed
refunding bonds.
(C) The annual increment for each year that the bonds that are
being retired or refunded would have been outstanding and
any other benefits to be derived from issuing the refunding
bonds.
(2) The requirements of this subdivision do not apply to a
school corporation that adopts a resolution under subsection
(g) before January 1, 2014, and that has a percentage
computed under subsection (c) that is at least twenty percent
(20%), as certified by the department of local government
finance. If the amount determined under subsection (c)(3) is:
(A) more than forty-five percent (45%), notwithstanding
IC 6-1.1-20-3.1(a) and IC 6-1.1-20-3.2(a), the school
corporation shall use the petition and remonstrance process
prescribed by IC 6-1.1-20-3.1(b) and IC 6-1.1-20-3.2(b) and
more individuals must sign the petition for the bond refunding
under this section than the number of individuals signing a
remonstrance against the bond refunding; or
(B) at least thirty percent (30%) but not more than forty-five
percent (45%), the school corporation shall conduct a
referendum on a public question regarding the bond refunding
using the process for a referendum tax levy under IC 20-46-1
and the bond refunding must be approved by the eligible
voters of the school corporation. The question to be submitted
to the voters in the referendum must read as follows:
"Shall ________ (insert the name of the school corporation)
issue refunding bonds to refund not more than fifty percent
(50%) of its outstanding bonds to provide an annual savings
to the school's debt service fund that can be transferred from
the school's debt service fund to the school's capital projects
fund, transportation fund, or school bus replacement fund?".
(3) The requirements of this subdivision apply to a school
corporation that adopts a resolution under subsection (g)
before January 1, 2014, and that has a percentage computed
under subsection (c) that is at least twenty percent (20%), as
certified by the department of local government finance. The
school corporation must either:
(A) have the distressed unit appeal board approve the
school corporation's financial plan for paying any
refunding bonds issued under this section, as provided in
subsection (e); or
(B) meet all of the following conditions:
(i) The ratio that the amount of the school corporation's
debt (as determined in December 2010) bears to the
school corporation's 2011 ADM ranks in the ten (10)
highest among all school corporations.
(ii) The ratio that the amount of the school corporation's
debt (as determined in December 2010) bears to the
school corporation's total assessed valuation for calendar
year 2011 ranks in the ten (10) highest among all school
corporations.
(iii) The amount of homestead assessed valuation in the
school corporation for calendar year 2011 was at least
sixty percent (60%) of the total amount of assessed
valuation in the school corporation for calendar year
2011.
(e) A school corporation meets the requirement of subsection
(d)(3)(A) if:
(1) the school corporation submits to the distressed unit
appeal board the school corporation's financial plan for
paying any refunding bonds issued under this section; and
(2) the distressed unit appeal board approves the plan after
making a determination that the financial plan is feasible.
The distressed unit appeal board must either approve or
disapprove the financial plan not more than sixty (60) days after
the later of the date the school corporation submits the financial
plan under this subsection or the date on which the department of
local government finance certifies the percentage computed for the
school corporation under subsection (c). The distressed unit appeal
board may not unreasonably deny approval of a school
corporation's financial plan under this subsection.
(f) Except as provided in subdivision (2)(A), subsection (d)(2)(A),
IC 6-1.1-20 does not apply to bonds issued under this section.
(e) (g) A school corporation that desires to be an eligible school
corporation under this section must, before July 1, 2013, and
notwithstanding any other law, adopt an ordinance a resolution that
sets forth the following:
(1) The determinations made under subsection (c), including the
department of local government finance's certification of the
percentage computed under subsection (c).
(2) The requirements of this subdivision do not apply to a
resolution adopted under this subsection before January 1,
2014, if the school corporation has a percentage computed
under subsection (c) that is at least twenty percent (20%), as
certified by the department of local government finance. The
result of the petition remonstrance process under subsection
(d)(2)(A) or the result of the vote on the public question under
subsection (d)(2)(B), whichever applies.
(3) A determination providing for the:
(A) issuance of bonds to refund not more than fifty percent (50%) of outstanding bonds or leases issued by or on behalf of the school corporation; and
(B) payment of redemption premiums and the costs of the refunding.
(4) With respect to the refunding bonds, the following:
(A) The maximum principal amount.
(B) The maximum interest rate.
(C) The annual lease or debt service payment.
(D) The final maturity date.
(E) The estimated amount of the increment that will occur for each year that the bonds that are being retired or refunded by the issuance of refunding bonds would have been outstanding.
(F) A finding that the annual debt service or lease payment on the refunding bonds will not increase the annual debt service or lease payment above the annual debt service or lease payment approved by the school corporation for the original project.
If the governing body adopts
(j) If a school corporation described in subsection (d)(3)(B) issues refunding bonds as permitted by this section, the school corporation must, not more than sixty (60) days after the department of local government finance certifies the school corporation's percentage under subsection (c), report information concerning the refunding to the distressed unit appeal board. The distressed unit appeal board shall make a non-binding review with recommendations regarding the school's financial condition and operating practices.
SECTION 2. IC 5-10-8-6.8 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 6.8. (a) This section applies to a school corporation that results from the consolidation, reorganization, or merger, after May 1, 2012, of:
(1) a school corporation that has elected to provide coverage of health care services for active and retired employees of the school corporation under a state employee health plan; and
(2) a school corporation that has not elected to provide coverage of health care services for active and retired employees of the school corporation under a state employee health plan.
(b) A school corporation that results from a consolidation, reorganization, or merger described in subsection (a) must allow an individual for whom the school corporation described in subsection (a)(1) had (as of the effective date of the consolidation, reorganization, or merger) health insurance liability under a state employee health plan to continue the individual's coverage under the state employee health plan for at least five (5) years, as long as the individual otherwise remains eligible for coverage under the plan.
(c) This SECTION expires January 1, 2018.
SECTION 3. IC 6-1.1-20.3-2, AS AMENDED BY P.L.146-2008, SECTION 202, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 2. As used in this chapter, "distressed political subdivision" means a political subdivision
SECTION 4. IC 6-1.1-20.3-4, AS AMENDED BY P.L.146-2008, SECTION 203, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 4. (a) The distressed unit appeal
board is established.
(b) The distressed unit appeal board consists of the following
members:
(1) The director of the office of management and budget or the
director's designee. The director or the director's designee shall
serve as chairperson of the distressed unit appeal board.
(2) The commissioner of the department of local government
finance or the commissioner's designee.
(3) The commissioner of the department of state revenue or the
commissioner's designee.
(4) (3) The state examiner of the state board of accounts or the
state examiner's designee.
(5) The following members appointed by the governor:
(A) One (1) member appointed from nominees submitted by
the Indiana Association of Cities and Towns.
(B) One (1) member appointed from nominees submitted by
the Association of Indiana Counties.
(C) One (1) member appointed from nominees submitted by
the Indiana Association of School Superintendents.
A member nominated and appointed under this subdivision must
be an elected official of a political subdivision.
(6) One (1) member appointed by the governor (in addition to
members appointed under subdivision (5)).
(7) One (1) member appointed by the speaker of the house of
representatives. A member appointed under this subdivision
serves a term of four (4) years.
(4) The state superintendent of public instruction or the
superintendent's designee.
(5) An individual appointed by the chairman of the legislative
council.
(c) The members appointed under subsection (b)(5) and subsection
(b)(6) serve at the pleasure of the governor.
(d) (c) Each member of the commission is entitled to reimbursement
for:
(1) traveling expenses as provided under IC 4-13-1-4; and
(2) other expenses actually incurred in connection with the
member's duties as provided in the state policies and procedures
established by the Indiana department of administration and
approved by the budget agency.
SECTION 5. IC 6-1.1-20.3-6, AS AMENDED BY P.L.146-2008,
SECTION 205, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 6. (a) For property taxes first
due and payable in 2008 and thereafter, The fiscal body and the
executive of a distressed political subdivision may petition the board
for relief as authorized under this chapter from the application of the
credit under IC 6-1.1-20.6 for a calendar year. political subdivision
may jointly file a petition with the board seeking to have the
political subdivision designated as a distressed political subdivision
under this chapter.
(b) A petition under subsection (a) must include a proposed
financial plan for the distressed political subdivision. The proposed
financial plan must include the following:
(1) Proposed budgets that would enable the distressed political
subdivision to cease being a distressed political subdivision.
(2) Proposed efficiencies, consolidations, cost reductions, uses of
alternative or additional revenues, or other actions that would
enable the distressed political subdivision to cease being a
distressed political subdivision.
(3) Proposed increases, if any, in the percentage thresholds
(specified as a percentage of gross assessed value) at which the
credit under IC 6-1.1-20.6 will apply, including any varying
percentages for different classes of property.
(4) Proposed reductions, if any, to the credits under IC 6-1.1-20.6
(by percentages), including any varying percentage reductions for
different classes of property.
(b) The governing body and the superintendent of a school
corporation may jointly file a petition with the board seeking relief
under section 8.3 of this chapter.
(c) The board may adopt procedures governing the timing and
required content of a petition under subsection (a).
SECTION 6. IC 6-1.1-20.3-6.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 6.5. (a) After the board
receives a petition concerning a political subdivision under section
6(a) of this chapter, the board may designate the political
subdivision as a distressed political subdivision if at least one (1) of
the following conditions applies to the political subdivision:
(1) The political subdivision has defaulted in payment of
principal or interest on any of its bonds or notes.
(2) The political subdivision has failed to make required
payments to payroll employees for thirty (30) days or two (2)
consecutive payrolls.
(3) The political subdivision has failed to make required
payments to judgment creditors for sixty (60) days beyond the
date of the recording of the judgment.
(4) The political subdivision, for at least thirty (30) days
beyond the due date, has failed to do any of the following:
(A) Forward taxes withheld on the incomes of employees.
(B) Transfer employer or employee contributions due
under the Federal Insurance Contributions Act (FICA).
(C) Deposit the political subdivision's minimum obligation
payment to a pension fund.
(5) The political subdivision has accumulated a deficit equal
to eight percent (8%) or more of the political subdivision's
revenues. For purposes of this subdivision, "deficit" means a
negative fund balance calculated as a percentage of revenues
at the end of a budget year for any governmental or
proprietary fund. The calculation must be presented on an
accrual basis according to generally accepted accounting
principles.
(6) The political subdivision has sought to negotiate a
resolution or an adjustment of claims that in the aggregate:
(A) exceed thirty percent (30%) of the political
subdivision's anticipated annual revenues; and
(B) are ninety (90) days or more past due.
(7) The political subdivision has carried over interfund loans
for the benefit of the same fund at the end of two (2)
successive years.
(8) The political subdivision has been severely affected, as
determined by the board, as a result of granting the property
tax credits under IC 6-1.1-20.6.
(9) In addition to the conditions listed in subdivisions (1)
through (8), and in the case of a school corporation, the board
may also designate a school corporation as a distressed
political subdivision if at least one (1) of the following
conditions applies:
(A) The school corporation has:
(i) issued refunding bonds under IC 5-1-5-2.5; or
(ii) adopted a resolution under IC 5-1-5-2.5 making the
determinations and including the information specified
in IC 5-1-5-2.5(g).
(B) The ratio that the amount of the school corporation's
debt (as determined in December 2010) bears to the school
corporation's 2011 ADM ranks in the highest ten (10)
among all school corporations.
(C) The ratio that the amount of the school corporation's debt (as determined in December 2010) bears to the school corporation's total assessed valuation for calendar year 2011 ranks in the highest ten (10) among all school corporations.
(D) The amount of homestead assessed valuation in the school corporation for calendar year 2011 was at least sixty percent (60%) of the total amount of assessed valuation in the school corporation for calendar year 2011.
The board may consider whether a political subdivision has fully exercised all the local options available to the political subdivision, such as a local option income tax or a local option income tax rate increase or, in the case of a school corporation, an operating referendum.
(b) If the board designates a political subdivision as distressed under subsection (a), the board shall review the designation annually to determine if the distressed political subdivision meets at least one (1) of the conditions listed in subsection (a).
(c) If the board designates a political subdivision as a distressed political subdivision under subsection (a), the board shall immediately notify:
(1) the treasurer of state; and
(2) the county auditor and county treasurer of each county in which the distressed political subdivision is wholly or partially located;
that the board has designated the political subdivision as a distressed political subdivision.
SECTION 7. IC 6-1.1-20.3-7 IS REPEALED [EFFECTIVE UPON PASSAGE].
SECTION 8. IC 6-1.1-20.3-7.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 7.5. (a) This section does not apply to a school corporation designated as a distressed political subdivision.
(b) If the board designates a political subdivision as a distressed political subdivision under section 6.5 of this chapter, the board shall appoint an emergency manager for the distressed political subdivision. An emergency manager serves at the pleasure of the board.
(c) The chairperson of the board shall oversee the activities of an emergency manager.
(d) The distressed political subdivision shall pay the emergency manager's compensation and reimburse the emergency manager for actual and necessary expenses.
SECTION 9. IC 6-1.1-20.3-8 IS REPEALED [EFFECTIVE UPON PASSAGE].
SECTION 10. IC 6-1.1-20.3-8.3 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 8.3. After the board receives
a petition concerning a school corporation under section 6(b) of
this chapter, the board shall review the school corporation's
request for a loan from the counter-cyclical revenue and economic
stabilization fund under IC 6-1.1-21.4-3(b). The board shall make
a recommendation to the state board of finance regarding the loan
request. The board may consider whether a school corporation has
attempted to secure temporary cash flow loans from the Indiana
bond bank or a financial institution in making its recommendation.
SECTION 11. IC 6-1.1-20.3-8.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 8.5. (a) This section does not
apply to school corporations.
(b) Notwithstanding any other law, an emergency manager of
a distressed political subdivision appointed under section 7.5 of this
chapter shall do the following:
(1) Assume and exercise the authority and responsibilities of
both the executive and the fiscal body of the political
subdivision concerning the adoption, amendment, and
enforcement of ordinances and resolutions relating to or
affecting the fiscal stability of the political subdivision.
However, the emergency manager does not have the power to
impose taxes or fees in addition to the taxes or fees authorized
by the political subdivision before the political subdivision
was designated a distressed political subdivision.
(2) Review the political subdivision's budget.
(3) Review salaries of the political subdivision's employees.
(4) Conduct a financial and compliance audit of the internal
operations of the political subdivision.
(5) Develop a written financial plan in consultation with the
officials of the political subdivision not later than six (6)
months after appointment.
(6) Develop a plan for paying all the political subdivision's
outstanding obligations.
(7) Review existing labor contracts.
(8) Adopt a budget for the political subdivision for each
calendar or fiscal year, as applicable, that the political
subdivision remains a distressed political subdivision.
(9) Review payrolls and other claims against the political
subdivision before payment.
(10) Make, approve, or disapprove the following:
(A) A contract.
(B) An expenditure.
(C) A loan.
(D) The creation of any new position.
(E) The filling of any vacant position.
(11) Submit a written report to the board every three (3)
months concerning:
(A) actions taken by the emergency manager;
(B) expenditures made by the distressed political
subdivision; and
(C) the work that has been done to remove the distressed
political subdivision from distressed status.
(12) Petition the board to terminate a political subdivision's
status as a distressed political subdivision when the conditions
found in section 6.5 of this chapter are no longer applicable to
the political subdivision.
(c) An emergency manager of a distressed political subdivision
appointed under section 7.5 of this chapter may do the following:
(1) Renegotiate existing labor contracts and act as an agent of
the political subdivision in collective bargaining.
(2) Reduce or suspend salaries of the political subdivision's
employees.
(3) Enter into agreements with other political subdivisions for
the provision of services.
(d) Except as provided in section 13(c) of this chapter, an
emergency manager of a distressed political subdivision retains the
powers and duties described in subsections (b) and (c) until:
(1) the emergency manager resigns or dies;
(2) the board removes the emergency manager; or
(3) the political subdivision's status as a distressed political
subdivision is terminated under section 13(b) of this chapter.
SECTION 12. IC 6-1.1-20.3-8.7 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 8.7. A school corporation that
is designated a distressed political subdivision may not do any of
the following without the approval of the board during the period
before the board terminates the school corporation's status as a
distressed political subdivision:
(1) Acquire real property for school building purposes.
(2) Construct new school buildings or remodel or renovate
existing school buildings.
(3) Incur a contractual obligation (except for a maintenance
contract or an employment contract for a new employee
whose employment replaces the employment of a former
employee) that requires an expenditure of more than thirty
thousand dollars ($30,000).
(4) Purchase or enter into an agreement to purchase personal
property at a cost of more than thirty thousand dollars
($30,000).
(5) Adopt or advertise a budget, tax levy, or tax rate for an
ensuing budget year.
SECTION 13. IC 6-1.1-20.3-10, AS ADDED BY P.L.146-2008,
SECTION 209, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 10. A distressed political
subdivision may petition the tax court for judicial review of a final
determination of the board under section 6.5 of this chapter. The
action must be taken to the tax court under IC 6-1.1-15 in the same
manner that an action is taken to appeal a final determination of the
Indiana board of tax review. The petition must be filed in the tax court
not more than forty-five (45) days after the board enters its final
determination.
SECTION 14. IC 6-1.1-20.3-13 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 13. (a) If:
(1) an emergency manager of a distressed political subdivision
that is not a school corporation;
(2) the fiscal body and executive of the political subdivision
jointly; or
(3) the governing body of a school corporation that:
(A) employs a new superintendent; or
(B) has a new member elected or appointed to its
governing body;
during the time the school corporation is a distressed political
subdivision;
files a petition with the board for termination of the political
subdivision's status as a distressed political subdivision, the board
shall conduct a public hearing on the question of whether to
terminate the political subdivision's status as a distressed political
subdivision.
(b) The board shall terminate the political subdivision's status
as a distressed political subdivision if the board finds that the
conditions found in section 6.5 of this chapter are no longer
applicable to the political subdivision.
(c) Notwithstanding any other section of this chapter, not later
than ninety (90) days after taking office, a new executive of a
distressed political subdivision may petition the board for
suspension of the political subdivision's distressed status. The
executive must include in its petition a written plan to resolve the
applicable issues described in section 6.5 of this chapter. If the
board approves the executive's written plan, the board may
suspend the political subdivision's distressed status for one
hundred eighty (180) days. Suspension under this chapter
terminates automatically upon expiration of the one hundred
eighty (180) day period. The board may consider a petition to
terminate the political subdivision's distressed status during a
period of suspension.
SECTION 15. IC 6-1.1-21.4-0.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 0.5. As used in this chapter,
"ADM" refers to a school corporation's average daily membership
as determined under IC 20-43-4-2.
SECTION 16. IC 6-1.1-21.4-2, AS ADDED BY P.L.131-2008,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 2. As used in this chapter, "eligible school
corporation" refers to either of the following:
(1) A school corporation located in a county in which
distributions of property tax revenue for 2007 or 2008 to the
taxing units (as defined in IC 6-1.1-1-21) of the county:
(1) (A) have not been made; or
(2) (B) were delayed by more than sixty (60) days after either
due date specified in IC 6-1.1-22-9.
(2) A school corporation that is:
(A) designated by the distressed unit appeal board as a
distressed political subdivision under IC 6-1.1-20.3; or
(B) approved for a loan by the distressed unit appeal board
under IC 6-1.1-20.3-8.3.
SECTION 17. IC 6-1.1-21.4-3, AS ADDED BY P.L.131-2008,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 3. (a) An eligible school corporation may
apply to the board for a loan from the counter-cyclical revenue and
economic stabilization fund.
(b) Subject to subsections (c) and (d) and section 3.5 of this
chapter, an eligible school corporation described in section 2(2) of
this chapter may apply to the board for a loan. The maximum
amount of a loan that the board may approve for the eligible school
corporation is the lesser of the following:
(1) Five million dollars ($5,000,000).
(2) The product of:
(A) one thousand dollars ($1,000); multiplied by
(B) the school corporation's 2012 ADM.
(c) At the time the distressed unit appeal board designates a
school corporation as a distressed political subdivision under
IC 6-1.1-20.3 or recommends under IC 6-1.1-20.3-8.3 that a loan
from the fund be approved for a school corporation, the distressed
unit appeal board may also recommend to the state board of
finance that a loan from the fund to the school corporation be
contingent upon any of the following:
(1) The sale of specified unused property by the school board.
(2) The school corporation modifying one (1) or more
specified contracts entered into by the school corporation.
(d) In making a loan from the fund to a school corporation, the
state board of finance may make the loan contingent upon any
condition recommended by the distressed unit appeal board under
subsection (c).
SECTION 18. IC 6-1.1-21.4-3.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 3.5. The board may not
approve a loan under this chapter after December 31, 2017.
SECTION 19. IC 6-1.1-21.4-4, AS ADDED BY P.L.131-2008,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 4. (a) The board, after review by the budget
committee, shall determine the terms of any loan made under this
chapter. However, The interest rate on the loan may not exceed one
percent (1%). is the interest rate established by the commissioner of
the department of state revenue under IC 6-8.1-10-1 minus two
percent (2%), but in no case shall the interest rate be less than one
percent (1%).
(b) The total amount of all loans under this chapter for all calendar
years may not exceed the following:
(1) Six million dollars ($6,000,000) for all calendar years
ending before January 1, 2012.
(2) The sum of the amounts approved under section 3(b) of
this chapter for all calendar years beginning after December
31, 2011, plus the outstanding balance of all loans that were
made under this chapter before 2012.
(c) An eligible school corporation receiving a loan under this
chapter must repay the loan within seventy-two (72) months after the
date on which the loan is made.
(d) The board may disburse in installments the proceeds of a loan
made under this chapter.
(e) An eligible school corporation may repay a loan made under this
chapter from any sources of revenue.
(f) The obligation to repay a loan made under this chapter is not a
basis for an eligible school corporation to obtain an excessive tax levy
under IC 6-1.1-19.
(g) Whenever the board receives a payment on a loan made under
this chapter, the board shall deposit the amount paid in the
counter-cyclical revenue and economic stabilization fund.
SECTION 20. IC 6-1.1-21.4-6, AS ADDED BY P.L.131-2008,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 6. A loan under this chapter is not bonded
indebtedness for purposes of IC 6-1.1-18.5 or IC 6-1.1-20.
SECTION 21. IC 6-1.1-21.4-7 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 7. Upon the failure of a school
corporation to repay any of the school corporation's obligations
under this chapter during a calendar year when due, the treasurer
of state, upon being notified of the failure by the board, shall pay
the unpaid obligations that are due from money in the possession
of the state that would otherwise be available for distribution to the
school corporation under any other law, deducting the payment
from the amount distributed. However, the treasurer of state may
not impair the rights of the school corporation's bondholders.
SECTION 22. IC 20-26-5-4, AS AMENDED BY HEA 1009-2012,
SECTION 131, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 4. In carrying out the school
purposes of a school corporation, the governing body acting on the
school corporation's behalf has the following specific powers:
(1) In the name of the school corporation, to sue and be sued and
to enter into contracts in matters permitted by applicable law.
However, a governing body may not use funds received from the
state to bring or join in an action against the state, unless the
governing body is challenging an adverse decision by a state
agency, board, or commission.
(2) To take charge of, manage, and conduct the educational affairs
of the school corporation and to establish, locate, and provide the
necessary schools, school libraries, other libraries where
permitted by law, other buildings, facilities, property, and
equipment.
(3) To appropriate from the school corporation's general fund an
amount, not to exceed the greater of three thousand dollars
($3,000) per budget year or one dollar ($1) per pupil, not to
exceed twelve thousand five hundred dollars ($12,500), based on
the school corporation's previous year's ADM, to promote the best
interests of the school corporation through:
(A) the purchase of meals, decorations, memorabilia, or
awards;
(B) provision for expenses incurred in interviewing job
applicants; or
(C) developing relations with other governmental units.
(4) To:
(A) Acquire, construct, erect, maintain, hold, and contract for
construction, erection, or maintenance of real estate, real estate
improvements, or an interest in real estate or real estate
improvements, as the governing body considers necessary for
school purposes, including buildings, parts of buildings,
additions to buildings, rooms, gymnasiums, auditoriums,
playgrounds, playing and athletic fields, facilities for physical
training, buildings for administrative, office, warehouse, repair
activities, or housing school owned buses, landscaping, walks,
drives, parking areas, roadways, easements and facilities for
power, sewer, water, roadway, access, storm and surface
water, drinking water, gas, electricity, other utilities and
similar purposes, by purchase, either outright for cash (or
under conditional sales or purchase money contracts providing
for a retention of a security interest by the seller until payment
is made or by notes where the contract, security retention, or
note is permitted by applicable law), by exchange, by gift, by
devise, by eminent domain, by lease with or without option to
purchase, or by lease under IC 20-47-2, IC 20-47-3, or
IC 20-47-5.
(B) Repair, remodel, remove, or demolish, or to contract for
the repair, remodeling, removal, or demolition of the real
estate, real estate improvements, or interest in the real estate
or real estate improvements, as the governing body considers
necessary for school purposes.
(C) Provide for conservation measures through utility
efficiency programs or under a guaranteed savings contract as
described in IC 36-1-12.5.
(5) To acquire personal property or an interest in personal
property as the governing body considers necessary for school
purposes, including buses, motor vehicles, equipment, apparatus,
appliances, books, furniture, and supplies, either by cash purchase
or under conditional sales or purchase money contracts providing
for a security interest by the seller until payment is made or by
notes where the contract, security, retention, or note is permitted
by applicable law, by gift, by devise, by loan, or by lease with or
without option to purchase and to repair, remodel, remove,
relocate, and demolish the personal property. All purchases and
contracts specified under the powers authorized under subdivision
(4) and this subdivision are subject solely to applicable law
relating to purchases and contracting by municipal corporations
in general and to the supervisory control of state agencies as
provided in section 6 of this chapter.
(6) To sell or exchange real or personal property or interest in real
or personal property that, in the opinion of the governing body, is
not necessary for school purposes, in accordance with IC 20-26-7,
to demolish or otherwise dispose of the property if, in the opinion
of the governing body, the property is not necessary for school
purposes and is worthless, and to pay the expenses for the
demolition or disposition.
(7) To lease any school property for a rental that the governing
body considers reasonable or to permit the free use of school
property for:
(A) civic or public purposes; or
(B) the operation of a school age child care program for
children who are at least five (5) years of age and less than
fifteen (15) years of age that operates before or after the school
day, or both, and during periods when school is not in session;
if the property is not needed for school purposes. Under this
subdivision, the governing body may enter into a long term lease
with a nonprofit corporation, community service organization, or
other governmental entity, if the corporation, organization, or
other governmental entity will use the property to be leased for
civic or public purposes or for a school age child care program.
However, if payment for the property subject to a long term lease
is made from money in the school corporation's debt service fund,
all proceeds from the long term lease must be deposited in the
school corporation's debt service fund so long as payment for the
property has not been made. The governing body may, at the
governing body's option, use the procedure specified in
IC 36-1-11-10 in leasing property under this subdivision.
(8) To:
(A) Employ, contract for, and discharge superintendents,
supervisors, principals, teachers, librarians, athletic coaches
(whether or not they are otherwise employed by the school
corporation and whether or not they are licensed under
IC 20-28-5), business managers, superintendents of buildings
and grounds, janitors, engineers, architects, physicians,
dentists, nurses, accountants, teacher aides performing
noninstructional duties, educational and other professional
consultants, data processing and computer service for school
purposes, including the making of schedules, the keeping and
analyzing of grades and other student data, the keeping and
preparing of warrants, payroll, and similar data where
approved by the state board of accounts as provided below,
and other personnel or services as the governing body
considers necessary for school purposes.
(B) Fix and pay the salaries and compensation of persons and
services described in this subdivision that are consistent with
IC 20-28-9-1.
(C) Classify persons or services described in this subdivision
and to adopt schedules of salaries or compensation that are
consistent with IC 20-28-9-1.
(D) Determine the number of the persons or the amount of the
services employed or contracted for as provided in this
subdivision.
(E) Determine the nature and extent of the duties of the
persons described in this subdivision.
The compensation, terms of employment, and discharge of
teachers are, however, subject to and governed by the laws
relating to employment, contracting, compensation, and discharge
of teachers. The compensation, terms of employment, and
discharge of bus drivers are subject to and governed by laws
relating to employment, contracting, compensation, and discharge
of bus drivers. The forms and procedures relating to the use of
computer and data processing equipment in handling the financial
affairs of the school corporation must be submitted to the state
board of accounts for approval so that the services are used by the
school corporation when the governing body determines that it is
in the best interest of the school corporation while at the same
time providing reasonable accountability for the funds expended.
(9) Notwithstanding the appropriation limitation in subdivision
(3), when the governing body by resolution considers a trip by an
employee of the school corporation or by a member of the
governing body to be in the interest of the school corporation,
including attending meetings, conferences, or examining
equipment, buildings, and installation in other areas, to permit the
employee to be absent in connection with the trip without any loss
in pay and to reimburse the employee or the member the
employee's or member's reasonable lodging and meal expenses
and necessary transportation expenses. To pay teaching personnel
for time spent in sponsoring and working with school related trips
or activities.
(10) Subject to IC 20-27-13, to transport children to and from
school, when in the opinion of the governing body the
transportation is necessary, including considerations for the safety
of the children and without regard to the distance the children live
from the school. The transportation must be otherwise in
accordance with applicable law.
(11) To provide a lunch program for a part or all of the students
attending the schools of the school corporation, including the
establishment of kitchens, kitchen facilities, kitchen equipment,
lunch rooms, the hiring of the necessary personnel to operate the
lunch program, and the purchase of material and supplies for the
lunch program, charging students for the operational costs of the
lunch program, fixing the price per meal or per food item. To
operate the lunch program as an extracurricular activity, subject
to the supervision of the governing body. To participate in a
surplus commodity or lunch aid program.
(12) To purchase textbooks, to furnish textbooks without cost or
to rent textbooks to students, to participate in a textbook aid
program, all in accordance with applicable law.
(13) To accept students transferred from other school corporations
and to transfer students to other school corporations in accordance
with applicable law.
(14) To make budgets, to appropriate funds, and to disburse the
money of the school corporation in accordance with applicable
law. To borrow money against current tax collections and
otherwise to borrow money, in accordance with IC 20-48-1.
(15) To purchase insurance or to establish and maintain a
program of self-insurance relating to the liability of the school
corporation or the school corporation's employees in connection
with motor vehicles or property and for additional coverage to the
extent permitted and in accordance with IC 34-13-3-20. To
purchase additional insurance or to establish and maintain a
program of self-insurance protecting the school corporation and
members of the governing body, employees, contractors, or agents
of the school corporation from liability, risk, accident, or loss
related to school property, school contract, school or school
related activity, including the purchase of insurance or the
establishment and maintenance of a self-insurance program
protecting persons described in this subdivision against false
imprisonment, false arrest, libel, or slander for acts committed in
the course of the persons' employment, protecting the school
corporation for fire and extended coverage and other casualty
risks to the extent of replacement cost, loss of use, and other
insurable risks relating to property owned, leased, or held by the
school corporation. In accordance with IC 20-26-17, to:
(A) participate in a state employee health plan under
IC 5-10-8-6.6 or IC 5-10-8-6.7;
(B) purchase insurance; or
(C) establish and maintain a program of self-insurance;
to benefit school corporation employees, including accident,
sickness, health, or dental coverage, provided that a plan of
self-insurance must include an aggregate stop-loss provision.
(16) To make all applications, to enter into all contracts, and to
sign all documents necessary for the receipt of aid, money, or
property from the state, the federal government, or from any other
source.
(17) To defend a member of the governing body or any employee
of the school corporation in any suit arising out of the
performance of the member's or employee's duties for or
employment with, the school corporation, if the governing body
by resolution determined that the action was taken in good faith.
To save any member or employee harmless from any liability,
cost, or damage in connection with the performance, including the
payment of legal fees, except where the liability, cost, or damage
is predicated on or arises out of the bad faith of the member or
employee, or is a claim or judgment based on the member's or
employee's malfeasance in office or employment.
(18) To prepare, make, enforce, amend, or repeal rules,
regulations, and procedures:
(A) for the government and management of the schools,
property, facilities, and activities of the school corporation, the
school corporation's agents, employees, and pupils and for the
operation of the governing body; and
(B) that may be designated by an appropriate title such as
"policy handbook", "bylaws", or "rules and regulations".
(19) To ratify and approve any action taken by a member of the
governing body, an officer of the governing body, or an employee
of the school corporation after the action is taken, if the action
could have been approved in advance, and in connection with the
action to pay the expense or compensation permitted under
IC 20-26-1 through IC 20-26-5, IC 20-26-7, IC 20-40-12, and
IC 20-48-1 or any other law.
(20) To exercise any other power and make any expenditure in
carrying out the governing body's general powers and purposes
provided in this chapter or in carrying out the powers delineated
in this section which is reasonable from a business or educational
standpoint in carrying out school purposes of the school
corporation, including the acquisition of property or the
employment or contracting for services, even though the power or
expenditure is not specifically set out in this chapter. The specific
powers set out in this section do not limit the general grant of
powers provided in this chapter except where a limitation is set
out in IC 20-26-1 through IC 20-26-5, IC 20-26-7, IC 20-40-12,
and IC 20-48-1 by specific language or by reference to other law.
SECTION 23. IC 20-27-13 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]:
Chapter 13. Termination of Transportation; Waiver
Sec. 1. As used in this chapter, "eligible student" means an
individual who in any part of a school year:
(1) is enrolled in a school corporation;
(2) has legal settlement in the school corporation;
(3) attended school in the school corporation's taxing district;
and
(4) is not required by federal or state law to receive
transportation services to and from school.
Sec. 2. This chapter applies to a school corporation that carried
out a general program in at least one (1) school year beginning
after June 30, 2010, to provide transportation to and from school
for eligible students.
Sec. 3. Except as provided in section 7 of this chapter, a school
corporation described in section 2 of this chapter shall carry out a
program to provide transportation to and from school for all
eligible students in any part of a school year beginning after June
30, 2012, unless the governing body of the school corporation:
(1) approves the termination of the transportation program;
and
(2) provides public notice of the date after which the
transportation will no longer be provided under the
transportation program;
at least three (3) years before the date after which the
transportation will no longer be provided under the transportation
program.
Sec. 4. Transportation provided in a transportation program
required under section 3 of this chapter may be limited by the
school corporation's governing body to children residing a
minimum distance from a school if the governing body includes
facts in the resolution setting the minimum distance that
demonstrate that each child residing less than the minimum
distance from the school can safely walk to and from the school
unattended by an adult during the regular hours that the child
would ordinarily be coming to or from the school.
Sec. 5. Transportation provided under a transportation
program required under section 3 of this chapter may be limited
by the school corporation's governing body to providing
transportation to school immediately before the beginning of an
instructional day (as described in IC 20-30-2-2) and from school
immediately after the end of an instructional day (as described in
IC 20-30-2-2) without additional accommodations for participation
in extracurricular activities.
Sec. 6. Transportation provided under a transportation
program required under section 3 of this chapter must be
otherwise in accordance with applicable law.
Sec. 7. (a) A school corporation may petition the department in
writing to waive the requirement imposed by section 3 of this
chapter.
(b) A petition under subsection (a) must:
(1) demonstrate that the waiver request was approved by the
governing body for the school corporation;
(2) describe the transportation services that will be provided
to students who are required by federal or state law to receive
transportation services to and from school;
(3) present a written plan that provides for the safe movement
of eligible students to and from school; and
(4) include any other information required by the department.
Sec. 8. If a petition complies with section 7 of this chapter, the
department shall conduct a public hearing on the petition in the
district served by the school corporation after giving notice of the
public hearing under IC 5-3-1.
Sec. 9. If, based on the information contained in the petition and
provided in the public hearing or otherwise made available to the
department, the department determines that the plan presented by
the school corporation, with or without revisions required by the
department:
(1) will protect the safety of eligible students enrolled in the
school corporation; and
(2) is otherwise in accordance with applicable law;
the department may waive the requirements imposed by section 3
of this chapter.
Sec. 10. The department may condition a waiver under section
9 of this chapter on the terms and conditions specified by the
department. If a school corporation fails to comply with a term or
condition of a waiver or the department discovers facts that
indicate that the school corporation's plan:
(1) is not protecting the safety of eligible students enrolled in
the school corporation; or
(2) is not otherwise in accordance with applicable law;
the department may issue an order under IC 4-21.5-3 or an
emergency or temporary order under IC 4-21.5-4 specifying the
actions that must be taken by the school corporation to correct the
deficiency. The order may suspend or terminate the waiver
granted under section 9 of this chapter beginning on the date
specified by the department.
SECTION 24. IC 20-40-2-4, AS ADDED BY P.L.2-2006,
SECTION 163, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 4. (a) Except as provided by
subsection (b) or any other law, any lawful school expenses payable
from any other fund of a school corporation, including debt service and
capital outlay, but excluding costs attributable to transportation (as
defined in IC 20-40-6-1), may be budgeted in and paid from the fund.
(b) Before January 1, 2018, costs attributable to transportation
(as defined in IC 20-40-6-1) may be budgeted in and paid from the
fund. After December 31, 2017, costs attributable to transportation
(as defined in IC 20-40-6-1) may not be budgeted in and paid from
the fund.
SECTION 25. IC 20-40-6-5, AS AMENDED BY P.L.234-2007,
SECTION 229, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 5. (a) Subject to this chapter
and except as provided in IC 20-40-2-4(b), the fund is the exclusive
fund to be used by a school corporation for the payment of costs
attributable to transportation.
(b) Contracted transportation service costs transferred to the school
bus replacement fund under IC 20-40-7 are payable from the school
bus replacement fund.
SECTION 26. IC 20-46-5-4, AS AMENDED BY P.L.172-2011,
SECTION 123, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 4. (a) Each school corporation
may levy for a calendar year a property tax for the fund in accordance
with the school bus acquisition plan adopted under this chapter. The
levy imposed for the March 1, 2011, and January 15, 2012, assessment
dates may not exceed the amount approved by the department of local
government finance under section 5 of this chapter and IC 6-1.1-17. In
setting the levy for the March 1, 2011, and January 15, 2012,
assessment dates, the department of local government finance shall
evaluate whether the levy proposed by a school corporation exceeds the
reasonable needs of the school corporation to carry out the purposes of
the fund and approve a levy that does not exceed the reasonable needs
of the school corporation to carry out the purposes of this chapter. In
making its determination, the department of local government finance
may consider whether a school corporation has in a previous year
transferred money from the fund to the school corporation's rainy day
fund or a fund other than the school bus replacement fund. Except as
provided in subsection (b), a levy imposed for an assessment date
after January 15, 2012, may not exceed an amount determined by
multiplying:
(1) the school corporation's maximum permissible levy
determined under this section for the previous year, after
eliminating the effects of temporary excessive levy appeals and
any other temporary adjustments made to the levy for the calendar
year (regardless of whether the school corporation imposed the
entire amount of the maximum permissible levy in the
immediately preceding year); by
(2) the assessed value growth quotient determined under
IC 6-1.1-18.5-2.
(b) The department of local government finance may, upon
petition by a school corporation, adjust the school corporation's
levy for the fund to reflect the school corporation's plan adopted
or amended under this chapter.
SECTION 27. IC 20-48-1-2, AS AMENDED BY P.L.1-2010,
SECTION 83, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 2. (a) As used in this section, "retirement or
severance liability" means the payments anticipated to be required to
be made to employees of a school corporation upon or after termination
of the employment of the employees by the school corporation under
an existing or previous employment agreement.
(b) This section applies to each school corporation that:
(1) did not issue bonds under IC 20-5-4-1.7 before its repeal; or
(2) issued bonds under IC 20-5-4-1.7 (repealed):
(A) before April 14, 2003; or
(B) after April 13, 2003, if an order approving the issuance of the bonds was issued by the department of local government finance before April 14, 2003.
(c) In addition to the purposes set forth in section 1 of this chapter, a school corporation described in subsection (b) may issue bonds to implement solutions to contractual retirement or severance liability. The issuance of bonds for this purpose is subject to the following conditions:
(1) The school corporation may issue bonds under this section only one (1) time.
(2) A school corporation described in subsection (b)(1) or (b)(2)(A) must issue the bonds before July 1, 2006.
(3) The solution to which the bonds are contributing must be reasonably expected to reduce the school corporation's unfunded contractual liability for retirement or severance payments as it existed on June 30, 2001.
(4) The amount of the bonds that may be issued for the purpose described in this section may not exceed:
(A) two percent (2%) of the true tax value of property in the school corporation, for a school corporation that did not issue bonds under IC 20-5-4-1.7 (before its repeal); or
(B) the remainder of:
(i) two percent (2%) of the true tax value of property in the school corporation as of the date that the school corporation issued bonds under IC 20-5-4-1.7 (before its repeal); minus
(ii) the amount of bonds that the school corporation issued under IC 20-5-4-1.7 (before its repeal);
for a school corporation that issued bonds under IC 20-5-4-1.7 (repealed) as described in subsection (b)(2).
(5) Each year that a debt service levy is needed under this section, the school corporation shall reduce the total property tax levy for the school corporation's transportation, school bus replacement, capital projects, and art association and historical society funds, as appropriate, in an amount equal to:
(A) the property tax levy needed for the debt service under this section; multiplied by
(B) the adjustment percentage set forth in subsection (f) or (g), as applicable.
The property tax rate for each of these funds shall be reduced each year until the bonds are retired.
(6) The school corporation shall establish a separate debt service fund for repayment of the bonds issued under this section.
(d) Bonds issued for the purpose described in this section shall be issued in the same manner as other bonds of the school corporation.
(e) Bonds issued under this section are not subject to the petition and remonstrance process under IC 6-1.1-20 or to the limitations contained in IC 36-1-15.
(f) This subsection applies only if the governing body of a school corporation adopts a resolution specifying that the adjustment percentages under this subsection apply to the school corporation. The adjustment percentage under this subsection is the following:
(1) For property taxes first due and payable in 2013, twenty-five percent (25%).
(2) For property taxes first due and payable in 2014, fifty percent (50%).
(3) For property taxes first due and payable in 2015, seventy-five percent (75%).
(4) For property taxes first due and payable after 2015, one hundred percent (100%).
(g) If the governing body of a school corporation does not adopt a resolution specifying that the adjustment percentages under subsection (f) apply to the school corporation, the adjustment percentage is one hundred percent (100%).
SECTION 28. [EFFECTIVE UPON PASSAGE] (a) The distressed unit appeal board established by IC 6-1.1-20.3-4 shall report to the budget committee before each of the following dates concerning actions taken by the distressed unit appeal board under IC 5-1-5-2.5, as amended by this act:
(1) October 1, 2012.
(2) March 1, 2013.
(3) October 1, 2013.
(4) February 1, 2014.
(b) This SECTION expires June 30, 2014.
SECTION 29. An emergency is declared for this act.
HEA 1192
Graphic file number 1 named seal1001.pcx with height 58 p and width 72 p Left aligned
