IC 20-42-2
    Chapter 2. County Administration of Congressional TownshipSchool Fund

IC 20-42-2-1
Application
    Sec. 1. This chapter applies to a county that has money in a fundand has not surrendered custody of the fund to the treasurer of stateunder section 4.5 of this chapter, or a predecessor law.
As added by P.L.2-2006, SEC.165. Amended by P.L.39-2008, SEC.1.

IC 20-42-2-2
"Fund"
    Sec. 2. As used in this chapter, "fund" refers to a congressionaltownship school fund administered by a county.
As added by P.L.2-2006, SEC.165.

IC 20-42-2-3
Sources of fund
    Sec. 3. The fund derived from the sale of congressional townshipschool lands constitutes the congressional township school fund.
As added by P.L.2-2006, SEC.165.

IC 20-42-2-4
Prohibition on reducing principal of fund
    Sec. 4. The fund shall never be diminished in amount.
As added by P.L.2-2006, SEC.165.

IC 20-42-2-4.5
Transfer of custody of fund balance to state
    Sec. 4.5. (a) A county council may adopt a resolution to:
        (1) elect to surrender the custody of the fund or any part of thefund; and
        (2) order the board of county commissioners, the countyauditor, and the county treasurer to take all steps necessary tosurrender the custody of the fund or part of the fund that is to besurrendered.
If the county council adopts a resolution under this section, theamount of money designated by the resolution distributed to and heldin trust by the county is to be transferred to the treasurer of state overa period not to exceed twenty (20) years. A county council may electwhether the county shall surrender all or any part of the fund. If thecounty retains custody of any money in the fund, the county shallloan the money as otherwise provided by law.
    (b) Within ten (10) days after the passage of the resolution by acounty council of a county electing to surrender the custody of thefund or part of the fund, the county auditor shall prepare and filewith the board of commissioners of the county a report showing thefollowing:
        (1) The total amount of the fund that has been entrusted to and

is held in trust by the county.
        (2) The total amount of the fund that is loaned as provided bylaw.
        (3) The total amount of the fund, if any, loaned to the countyand which loans are unpaid.
        (4) The total amount of the fund held in cash in the possessionand custody of the county and that is not loaned.
        (5) A separate schedule of past due loans. The schedule mustshow the unpaid balance of principal and the amount ofdelinquent interest due and unpaid on each delinquent loan.
    (c) The board of county commissioners shall examine the reports,and, if found correct, the board of county commissioners shall order:
        (1) that the report be entered on its records; and
        (2) the county auditor to draw the county auditor's warrant,payable to the treasurer of state, for the amount of the fund thatis not loaned and is held in cash in the custody and possessionof the county as shown by the report.
The county auditor shall forward the warrants to the auditor of statetogether with a certified copy of the report. The county auditor shallalso forward with the payment a certified copy of the resolution ofthe county council electing to surrender the custody of the fund orany part of the fund.
    (d) After passage by the county council of a resolution electing tosurrender the custody of the fund or any part of the fund, no part ofthe fund up to the amount designated in the resolution that is notsurrendered to the treasurer of state and is in the custody of thecounty may be loaned by the county or by any official of the county.Except as provided in this subsection, all outstanding loans of thefund not part of the amount retained by the county at the time of thepassage of the resolution shall be collected when due. Any loan thatcomes due and payable after the passage of the resolution may berenewed for one (1) additional five (5) year period, on the applicationof the person owing the loan as provided by law. However, a loanthat is more than one (1) year delinquent in payment of principal orinterest at the time of the passage of the resolution of the countycouncil may not be renewed.
    (e) The maximum time to surrender money that the countydesignates in the resolution is for a period not to exceed twenty (20)years. On:
        (1) May 1 or November 1 immediately after the passage of theresolution electing to surrender the fund or any part of the fund;and
        (2) each May 1 and November 1 thereafter;
all the money collected and on hand up to the amount designated inthe resolution that belongs to the fund that is to be surrendered shallbe paid to the treasurer of state. If at the time for a semiannualpayment the amount collected and paid to the treasurer of state whenadded to the amounts previously paid to the treasurer of state is lessthan the result determined by multiplying two and one-half percent(2.5%) of the amount in the resolution by the number of semiannual

payments that have occurred after the passage of the resolution, thecounty auditor shall draw the county auditor's warrant on the generalfund of the county for an amount sufficient to pay to the treasurer ofstate the difference between the amount paid and the amount equalto the result of multiplying two and one-half percent (2.5%) of theamount designated in the resolution by the number of semiannualpayments that have occurred after the passage of the resolution.
    (f) The board of county commissioners shall, in its annual budgetestimate, include an estimate of the amount necessary to make thepayments from the county general fund as required by this section,and the county council shall appropriate the amount of the estimate.
    (g) A county is subrogated to all the rights and remedies of thestate with respect to loans made from a fund held in trust by thecounty to the extent of any and all payments made from the countygeneral fund under this chapter.
    (h) If a county elects to transfer custody of the fund or any part ofthe fund to the treasurer of state, the treasurer of state shall ensurethat the principal of the fund belonging to any congressionaltownship or a part of a congressional township shall never bediminished in amount.
    (i) If a county elects to transfer custody of the fund or any part ofthe fund to the treasurer of state, the treasurer of state shall take stepsto ensure that the income of the fund belonging to any congressionaltownship or a part of a congressional township may not be:
        (1) diminished by an apportionment; or
        (2) diverted or distributed to another township.
As added by P.L.39-2008, SEC.2.

IC 20-42-2-5
County liability for fund
    Sec. 5. A county shall be held liable for the:
        (1) preservation of the part of the fund as is entrusted or hasbeen entrusted to the county; and
        (2) payment of the annual interest on the fund, at the rateestablished by law.
As added by P.L.2-2006, SEC.165.

IC 20-42-2-6
Deposit of interest in fund
    Sec. 6. The payment of annual interest must be full and completeevery year. The payment must appear in the county auditor's ortreasurer of state's report to the state superintendent. The statesuperintendent shall, at any time when the state superintendentdiscovers that there is a deficit in the amount collected, direct theattention of the board of county commissioners and the countyauditor to the fact. The board of commissioners shall provide for thedeficit in the commissioners' respective counties.
As added by P.L.2-2006, SEC.165. Amended by P.L.39-2008, SEC.3.

IC 20-42-2-7 Annual distribution of balance to school corporations
    Sec. 7. The county auditor of each county or the treasurer of stateshall, semiannually, on the second Monday of July and on the lastMonday in January make apportionment of the amount of thecongressional township school revenue belonging to each schoolcorporation. The apportionment shall be paid to each schoolcorporation's treasurer.
As added by P.L.2-2006, SEC.165. Amended by P.L.39-2008, SEC.4.

IC 20-42-2-8
Report to state superintendent
    Sec. 8. The county auditor or treasurer of state shall report theamount apportioned to the state superintendent, verified by affidavit.
As added by P.L.2-2006, SEC.165. Amended by P.L.39-2008, SEC.5.

IC 20-42-2-9
Distributions proportional to balance deposited in fund fromtownship
    Sec. 9. The income of the fund belonging to any congressionaltownship or part of a congressional township may not be:
        (1) diminished by an apportionment; or
        (2) diverted or distributed to another township.
As added by P.L.2-2006, SEC.165.

IC 20-42-2-10
Loans; required interest rate
    Sec. 10. The:
        (1) principal belonging to the fund; and
        (2) accumulations to the principal of a fund held by a county;
must be loaned at four percent (4%) per annum. Loans made beforeJune 1, 1943, with a rate of interest higher than four percent (4%) perannum must have an interest rate of four percent (4%) per annum.
As added by P.L.2-2006, SEC.165.

IC 20-42-2-11
Minimum balance; loans; maximum term
    Sec. 11. In a county where the total amount in the:
        (1) common school fund; or
        (2) fund;
accumulates to the amount of at least one thousand dollars ($1,000),a county may borrow and use the funds, or any part of the funds, forany lawful purpose for a period not exceeding five (5) years.
As added by P.L.2-2006, SEC.165. Amended by P.L.162-2006,SEC.41.

IC 20-42-2-12
Form of loan agreement
    Sec. 12. (a) If a county council borrows funds under this chapter,the county council shall adopt an ordinance specifying the amount ofthe funds to be borrowed and specify the time when the loan will be

made. The board of county commissioners shall execute to the stateof Indiana for the use of the funds a written obligation, executed bythe board of county commissioners and attested by the countyauditor, that specifies the following:
        (1) The facts under which the written obligation is executed.
        (2) The sum of money borrowed.
        (3) The time when the money will be repaid to the fund by thecounty.
    (b) The obligation must be deposited with the county auditor. Thecounty auditor shall retain the obligation and record entriesconcerning the loans. The provisions of IC 6-1.1-20 concerning theloan to the county from the school funds apply to this section.
As added by P.L.2-2006, SEC.165.

IC 20-42-2-13
Distribution of loaned amount from fund
    Sec. 13. After the obligation is deposited with the county auditorunder section 12 of this chapter, the county auditor shall issue awarrant to the county treasurer to be paid to the county for theamount of money specified in the ordinance and obligation. Whenthe warrant is presented to the county treasurer, the treasurer shalltransfer from the fund the amount contained in the warrant from theprincipal sum of the fund to the credit of the county revenue of thecounty. Funds transferred under this section become a part of thegeneral revenue funds of the county.
As added by P.L.2-2006, SEC.165.

IC 20-42-2-14
Investments
    Sec. 14. (a) If the funds remain in the county treasury of thecounty for four (4) months without having been loaned under thischapter, upon the request of the county auditor, the board of countycommissioners may, by an order entered of record, direct the countytreasurer to invest the funds in:
        (1) bonds, notes, certificates, and other valid obligations of theUnited States; and
        (2) bonds, notes, debentures, and other securities issued by anyfederal instrumentality that are fully guaranteed by the UnitedStates.
    (b) If it becomes necessary to obtain the funds invested in thegovernment bonds under subsection (a) to be able to make a loan toany borrower, whose application has been approved and granted, thetreasurer shall sell, at the earliest opportunity, a sufficient amount ofthe government bonds to make the loan.
As added by P.L.2-2006, SEC.165.

IC 20-42-2-15
Receipts for payment of principal or interest on loan
    Sec. 15. All payments of principal or interest must be paid to thecounty treasurer. The:        (1) treasurer shall file a receipt with the county auditor; and
        (2) auditor shall give the payor a receipt and record thepayment.
The county auditor may accept payment of principal or interest if thecounty auditor can immediately transmit and pay the payment to thecounty treasurer.
As added by P.L.2-2006, SEC.165.