§ 20-48-1-11 — Annual review of obligations; department of local government finance; increase in levy to pay obligations; intercept of state distributions to pay obligations

Indiana § 20-48-1-11

• Jurisdiction: Indiana
• Title 20: EDUCATION
• Art. 48: BORROWING AND BONDS

Text

(a) As used in this section, "debt service
obligations" refers to the principal and interest payable:
(1) on a school corporation's general obligation bonds and lease
rentals under IC 20-47-2 and IC 20-47-3; or
(2) to a school corporation's designated paying agent under a
written agreement entered into in connection with the issuance of
the school corporation's general obligation bonds.
(b) Before the end of each calendar year, the department of local
government finance shall review the bond and lease rental levies, or
any levies that replace bond and lease rental levies, of each school
corporation that are payable in the next succeeding calendar year and
the appropriations from the levies from which the school corporation
is to pay the amount, if any, of the school corporation's debt service
obligations for that next succeeding calendar year. If the levies and
appropriations of the school corporation are not sufficient to pay the
debt service obligations for the next succeeding calendar year, the
department of local government finance shall establish for each school
corporation:
(1) bond or lease rental levies, or any levies that replace the bond
and lease rental levies; and
(2) appropriations;
that are sufficient to pay the debt service obligations for that next
succeeding calendar year.
(c) Upon the failure of a school corporation to pay any of the school
corporation's debt service obligations when due, the treasurer of state,
upon being notified of the failure by a claimant, shall within five (5)
days, excluding Saturdays, Sundays, and legal holidays, pay the unpaid
debt service obligations that are due from the funds of the state in an
amount equal to the amount of the unpaid debt service obligations that
are due to the claimant, but only to the extent that amounts described
in subsection (d) are available to the treasurer of state to fulfill the
requirements of this subsection. Notwithstanding IC 4-13-2-18, IC 20-43-2-1, or any other law, administrative rule, policy, or schedule to
the contrary, upon the treasurer of state receiving a request from a
claimant as described in this subsection the treasurer of state shall
immediately contact the school corporation and the claimant to confirm
whether the school corporation is unable to make the required payment
on the date on which it is due, and, if confirmed, the treasurer of state
shall provide notice of the request to the budget director, the state
comptroller, and any department or agency of the state responsible for
distributing funds appropriated by the general assembly for distribution
to the school corporation from state funds. A department or agency of
the state shall, not later than three (3) days after receiving the treasurer
of state's notice, excluding Saturdays, Sundays, or legal holidays,
transfer the funds and make the funds available to the treasurer of state
in order for the treasurer of state to fulfill the obligations of this
subsection.
(d) Notwithstanding any other law to the contrary, amounts made
available to the treasurer of state for purposes of subsection (c) shall be
made from the following sources, in the following amounts, and in the
following order of priority:
(1) First, from amounts appropriated by the general assembly for
the state fiscal year for distribution to the school corporation from
state funds.
(2) Second, and to the extent that the amounts described in
subdivision (1) are insufficient, from any remaining amounts
appropriated by the general assembly for distribution for tuition
support in each state fiscal year in excess of the aggregate amount
of tuition support needed for distribution to school corporations
in accordance with the schedule set and approved in accordance
with IC 20-43-2-1.
(3) Third, and to the extent that the amounts described in
subdivisions (1) and (2) are insufficient and the general assembly
has adopted a biennial budget appropriating amounts in the
immediately succeeding state fiscal year for distribution to the
school corporation from state funds, then from such fund or
account, as determined by the state budget director, from which
fund or account there is appropriated to the treasurer of state in
the current state fiscal year an amount equal to the lesser of:
(A) the unpaid debt service obligations not paid from sources
described in subdivisions (1) and (2); or
(B) the amount appropriated by the general assembly for the
immediately succeeding state fiscal year for distribution to the
school corporation from state funds, subject to IC 4-13-2-18(i).
(e) Notwithstanding any other law to the contrary, if any amounts
are transferred to the treasurer of state under subsection (c), the
applicable department or agency shall recover those amounts by:
(1) deducting an amount equal to the transfer from any future
amounts to be distributed to the school corporation from state
funds appropriated by the general assembly; and
(2) transferring any amount deducted under subdivision (1) to the
treasurer of state for the purpose of allowing the treasurer of state
to reimburse the fund or account from which the transfer was
made.
(f) A reduction of distributions to a school corporation under
subsection (e) must be made:
(1) first, from all funds except state tuition support; and
(2) second, from state tuition support.
(g) This section shall be interpreted liberally so that the state shall
to the extent legally valid ensure that the debt service obligations of
each school corporation are paid. However, this section does not create
a debt of the state.
[Pre-2006 Recodification Citation: 21-2-21-10.]

Legislative History

As added by P.L.2-2006, SEC.171. Amended by P.L.146-2008, SEC.525; P.L.167-2017, SEC.1; P.L.9-2024, SEC.403.