CHAPTER 1. BORROWING AND BONDS
IC 20-48
ARTICLE 48. BORROWING AND BONDS
IC 20-48-1
Chapter 1. Borrowing and Bonds
IC 20-48-1-1
Powers; issuance of bonds; improvement of real estate
Sec. 1. (a) As used in this section, "improvement of real estate"includes:
(1) construction, reconstruction, remodeling, alteration, orrepair of buildings or additions to buildings;
(2) equipment related to activities specified in subdivision (1);and
(3) auxiliary facilities related to activities specified insubdivision (1), including facilities for:
(A) furnishing water, gas, and electricity;
(B) carrying and disposing of sewage and storm and surfacewater drainage;
(C) housing of school owned buses;
(D) landscaping of grounds; and
(E) construction of walks, drives, parking areas,playgrounds, or facilities for physical training.
(b) A school corporation is authorized to issue bonds to pay the:
(1) cost of acquisition and improvement of real estate for schoolpurposes;
(2) funding of judgments;
(3) cost of the purchase of school buses; and
(4) incidental expenses incurred in connection with and onaccount of the issuance of the bonds.
As added by P.L.2-2006, SEC.171.
IC 20-48-1-2
Powers; issuance of bonds; retirement or severance liability
Sec. 2. (a) As used in this section, "retirement or severanceliability" means the payments anticipated to be required to be madeto employees of a school corporation upon or after termination of theemployment of the employees by the school corporation under anexisting 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(2) issued bonds under IC 20-5-4-1.7 (repealed):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 issuanceof the bonds was issued by the department of localgovernment finance before April 14, 2003.
(c) In addition to the purposes set forth in section 1 of thischapter, a school corporation described in subsection (b) may issuebonds to implement solutions to contractual retirement or severanceliability. The issuance of bonds for this purpose is subject to the
following conditions:
(1) The school corporation may issue bonds under this sectiononly 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 bereasonably expected to reduce the school corporation'sunfunded contractual liability for retirement or severancepayments as it existed on June 30, 2001.
(4) The amount of the bonds that may be issued for the purposedescribed in this section may not exceed:
(A) two percent (2%) of the true tax value of property in theschool corporation, for a school corporation that did notissue 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 theschool corporation as of the date that the schoolcorporation issued bonds under IC 20-5-4-1.7 (before itsrepeal); minus
(ii) the amount of bonds that the school corporation issuedunder IC 20-5-4-1.7 (before its repeal);
for a school corporation that issued bonds underIC 20-5-4-1.7 (repealed) as described in subsection (b)(2).
(5) Each year that a debt service levy is needed under thissection, the school corporation shall reduce the total propertytax levy for the school corporation's transportation, school busreplacement, capital projects, and art association and historicalsociety funds, as appropriate, in an amount equal to the propertytax levy needed for the debt service under this section. Theproperty tax rate for each of these funds shall be reduced eachyear until the bonds are retired.
(6) The school corporation shall establish a separate debtservice fund for repayment of the bonds issued under thissection.
(d) Bonds issued for the purpose described in this section shall beissued in the same manner as other bonds of the school corporation.
(e) Bonds issued under this section are not subject to the petitionand remonstrance process under IC 6-1.1-20 or to the limitationscontained in IC 36-1-15.
As added by P.L.2-2006, SEC.171. Amended by P.L.1-2007,SEC.155; P.L.1-2010, SEC.83.
IC 20-48-1-3
Payment schedule; maximum term; designee of paying agent
Sec. 3. (a) Bonds authorized by this article and IC 20-26-1through IC 20-26-5 must be payable in the amounts and at the timesand places determined by the governing body.
(b) Bonds issued for the funding of judgments or for the purchaseof school buses shall mature not more than five (5) years from thedate of the bonds. Bonds issued for other purposes must mature not
more than twenty-five (25) years from the date of the bonds.
(c) The governing body may provide that principal and interest ofthe bonds are payable at a bank in Indiana and may also be payableat the option of the holder at another bank designated by thegoverning body, either before or after the sale.
(d) The governing body may pay the fees of the bank paying agentand shall deposit with the paying agent, if any, within a reasonableperiod before the date that principal and interest become duesufficient money for the payment of the principal and interest on thedue date.
As added by P.L.2-2006, SEC.171.
IC 20-48-1-4
Conditions of sale; par value; public sale; interest rate; approvalrequired for certain bonds
Sec. 4. (a) Bonds issued by a school corporation must be sold at:
(1) not less than par value;
(2) public sale as provided by IC 5-1-11; and
(3) any rate or rates of interest determined by the bidding.
(b) This subsection does not apply to bonds for which a schoolcorporation:
(1) after June 30, 2008, makes a preliminary determination asdescribed in IC 6-1.1-20-3.1 or IC 6-1.1-20-3.5 or a decision asdescribed in IC 6-1.1-20-5; or
(2) in the case of bonds not subject to IC 6-1.1-20-3.1,IC 6-1.1-20-3.5, or IC 6-1.1-20-5, adopts a resolution orordinance authorizing the bonds after June 30, 2008.
If the net interest cost exceeds eight percent (8%) per year, the bondsmust not be issued until the issuance is approved by the departmentof local government finance.
As added by P.L.2-2006, SEC.171. Amended by P.L.146-2008,SEC.522.
IC 20-48-1-5
Signatures; issuing party
Sec. 5. (a) Bonds shall be executed in the name and on behalf ofthe school corporation by the president and secretary of thegoverning body. One (1) of the signatures may be by facsimileimprinted on a bond instrument, but at least one (1) of the signaturesshall be manually affixed. The secretary of the governing body shallcause the seal of the school corporation to be impressed or afacsimile of the seal printed on each bond. Interest coupons, if any,shall be executed by the facsimile signature of the treasurer of thegoverning body.
(b) If the president, secretary, or treasurer of the governing bodyceases to be the president, secretary, or treasurer for any reason afterthe officer has executed bonds under this section but before thebonds have been delivered to the purchaser or purchasers of thebonds, the bonds are binding and valid obligations as if the officerwere in office at the time of delivery. The treasurer of the governing
body shall cause the bonds to be delivered to the purchaser orpurchasers and shall receive payment for the bonds.
As added by P.L.2-2006, SEC.171.
IC 20-48-1-6
Required levy; payment of obligations
Sec. 6. (a) The governing body shall provide for the payment ofprincipal and interest on bonds executed under section 5 of thischapter by levying annually a tax that is sufficient to pay theprincipal and interest as the bonds become due.
(b) The bodies charged with the review of budgets and tax leviesshall review a levy for principal and interest described in subsection(a) to determine whether the levy is sufficient.
As added by P.L.2-2006, SEC.171.
IC 20-48-1-7
Emergency loans
Sec. 7. (a) This section applies if a governing body finds bywritten resolution that an emergency exists that requires theexpenditure of money for a lawful corporate purpose that was notincluded in the school corporation's existing budget and tax levy.
(b) If a governing body makes a finding specified in subsection(a), the governing body may authorize making an emergency loanthat may be evidenced by the issuance of the school corporation'snote in the same manner and subject to the same procedure andrestrictions as provided for the issuance of the school corporation'sbonds, except as to purpose.
(c) If a governing body authorizes an emergency loan as specifiedin subsection (b), the governing body shall, at the time for makingthe next annual budget and tax levy for the school corporation, makea levy to the credit of the fund for which the expenditure is madesufficient to pay the loan and the interest on the loan. However, theinterest on the loan may be paid from the debt service fund.
As added by P.L.2-2006, SEC.171.
IC 20-48-1-8
Bonds; emergency loans; compliance with other laws
Sec. 8. The provisions of all general statutes and rules relating to:
(1) filing petitions requesting the issuance of bonds and givingnotice of the issuance of bonds;
(2) giving notice of determination to issue bonds;
(3) giving notice of a hearing on the appropriation of theproceeds of the bonds and the right of taxpayers to appear andbe heard on the proposed appropriation; and
(4) the right of taxpayers and voters to remonstrate against orvote on, as applicable, the issuance of bonds;
apply to proceedings for the issuance of bonds and the making of anemergency loan under this article and IC 20-26-1 through IC 20-26-5.An action to contest the validity of the bonds or emergency loansmay not be brought later than five (5) days after the acceptance of a
bid for the sale of the bonds.
As added by P.L.2-2006, SEC.171. Amended by P.L.219-2007,SEC.99; P.L.146-2008, SEC.523.
IC 20-48-1-9
Anticipation warrants
Sec. 9. (a) If the governing body of a school corporation finds anddeclares that an emergency exists to borrow money with which topay current expenses from a particular fund before the receipt ofrevenues from taxes levied or state tuition support distributions forthe fund, the governing body may issue warrants in anticipation ofthe receipt of the revenues.
(b) The principal of warrants issued under subsection (a) ispayable solely from the fund for which the taxes are levied or fromthe school corporation's general fund in the case of anticipated statetuition support distributions. However, the interest on the warrantsmay be paid from the debt service fund, from the fund for which thetaxes are levied, or the general fund in the case of anticipated statetuition support distributions.
(c) The amount of principal of temporary loans maturing on orbefore June 30 for any fund may not exceed eighty percent (80%) ofthe amount of taxes and state tuition support distributions estimatedto be collected or received for and distributed to the fund at the Junesettlement.
(d) The amount of principal of temporary loans maturing afterJune 30 and on or before December 31 may not exceed eightypercent (80%) of the amount of taxes and state tuition supportdistributions estimated to be collected or received for and distributedto the fund at the December settlement.
(e) The county auditor or the auditor's deputy shall determine theestimated amount of taxes and state tuition support distributions tobe collected or received and distributed. The warrants evidencing aloan in anticipation of tax revenue or state tuition supportdistributions may not be delivered to the purchaser of the warrantand payment may not be made on the warrant before January 1 of theyear the loan is to be repaid. However, the proceedings necessary forthe loan may be held and carried out before January 1 and before theapproval. The loan may be made even though a part of the lastpreceding June or December settlement has not been received.
(f) Proceedings for the issuance and sale of warrants for more thanone (1) fund may be combined. Separate warrants for each fund mustbe issued, and each warrant must state on the face of the warrant thefund from which the warrant's principal is payable. An action tocontest the validity of a warrant may not be brought later than fifteen(15) days after the first publication of notice of sale.
(g) An issue of tax or state tuition support anticipation warrantsmay not be made if the total of all tax or state tuition supportanticipation warrants exceeds twenty thousand dollars ($20,000)until the issuance is advertised for sale, bids are received, and anaward is made by the governing body as required for the sale of
bonds, except that the publication of notice of the sale is notnecessary:
(1) outside the county; or
(2) more than ten (10) days before the date of sale.
As added by P.L.2-2006, SEC.171. Amended by P.L.146-2008,SEC.524.
IC 20-48-1-10
Temporary transfers among funds
Sec. 10. Temporary transfers of funds by a school corporationmay be made as authorized under IC 36-1-8-4.
As added by P.L.2-2006, SEC.171.
IC 20-48-1-11
Annual review of obligations; department of local governmentfinance; increase in levy to pay obligations; intercept of statedistributions to pay obligations
Sec. 11. (a) As used in this section, "debt service obligations"refers to the principal and interest payable during a calendar year ona school corporation's general obligation bonds and lease rentalsunder IC 20-47-2 and IC 20-47-3.
(b) Before the end of each calendar year, the department of localgovernment finance shall review the bond and lease rental levies, orany levies that replace bond and lease rental levies, of each schoolcorporation that are payable in the next succeeding year and theappropriations from the levies from which the school corporation isto pay the amount, if any, of the school corporation's debt serviceobligations. If the levies and appropriations of the school corporationare not sufficient to pay the debt service obligations, the departmentof local government finance shall establish for each schoolcorporation:
(1) bond or lease rental levies, or any levies that replace thebond and lease rental levies; and
(2) appropriations;
that are sufficient to pay the debt service obligations.
(c) Upon the failure of a school corporation to pay any of theschool corporation's debt service obligations during a calendar yearwhen due, the treasurer of state, upon being notified of the failure bya claimant, shall pay the unpaid debt service obligations that are duefrom the funds of the state only to the extent of the amountsappropriated by the general assembly for the calendar year fordistribution to the school corporation from state funds, deducting thepayment from the appropriated amounts. A deduction under thissubsection must be made:
(1) first from all funds except state tuition support; and
(2) second from state tuition support.
(d) This section shall be interpreted liberally so that the state shallto the extent legally valid ensure that the debt service obligations ofeach school corporation are paid. However, this section does notcreate a debt of the state.As added by P.L.2-2006, SEC.171. Amended by P.L.146-2008,SEC.525.