§ 20-47-3-5 — Required terms of lease agreement; option to purchase

(a) Except as provided in subsections (d) and
(e), a lease must provide that the school corporation or corporations
have an option to:
(1) renew the lease for a further term on like conditions; and
(2) purchase the property covered by the lease;
with the terms and conditions of the purchase to be specified in the
lease, subject to the approval of the department of local government
finance.
(b) If the option to purchase the property covered by the lease is
exercised, the school corporation or corporations, to procure funds to
pay the purchase price, may issue and sell bonds under the provisions
of the general statute governing the issue and sale of bonds of the
school corporation or corporations. The purchase price may not be
more than the purchase price set forth in the lease plus:
(1) two percent (2%) of the purchase price as prepayment penalty
for purchase within the first five (5) years of the lease term; or
(2) one percent (1%) of the purchase price as prepayment penalty
for purchase in the second five (5) years of the lease term;
and thereafter the purchase shall be without prepayment penalty.
(c) However:
(1) if the school corporation or corporations have not exercised an
option to purchase the property covered by the lease at the
expiration of the lease; and
(2) upon the full discharge and performance by the school
corporation or corporations of their obligations under the lease;
the property covered by the lease becomes the absolute property of the
school corporation or corporations, and the lessor corporation shall
execute proper instruments conveying to the school corporation or
corporations good and merchantable title to that property.
(d) The following provisions apply to a school corporation that is
located in Dubois County and enters into a lease with a religious
organization or the organization's agent as authorized under section 4
of this chapter:
(1) The lease is not required to include on behalf of the school
corporation an option to purchase the property covered by the
lease.
(2) The lease must include an option to renew the lease.
(3) The property covered by the lease is not required to become
the absolute property of the school corporation as provided in
subsection (c).
(e) In the case of a lease for which a school corporation:
(1) after June 30, 2008, makes a preliminary determination as
described in IC 6-1.1-20-3.1 or IC 6-1.1-20-3.5 or a decision as
described in IC 6-1.1-20-5; or
(2) in the case of a lease 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 or ordinance
authorizing the lease after June 30, 2008;
the terms and conditions of the purchase that are specified in the lease
are not subject to the approval of the department of local government
finance.
[Pre-2006 Recodification Citation: 21-5-12-3.]

Legislative History

As added by P.L.2-2006, SEC.170. Amended by P.L.146-2008, SEC.517.