§ 5-1-5-2.5 — Issuance of refunding bonds by an eligible school corporation

Indiana § 5-1-5-2.5

• Jurisdiction: Indiana
• Title 5: STATE AND LOCAL ADMINISTRATION
• Art. 1: BONDS AND OTHER OBLIGATIONS
• Ch. 5: Refunding Bonds Generally

Text

5. (a) As used in this section, "eligible school
corporation" means a school corporation (as defined in IC 36-1-2-17)
that satisfies all the conditions required by this section.
(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%), 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; and
(B) operations fund (IC 20-46-8).
(2) Compute the school corporation's levy for the school
corporation's operations 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 shall conduct a public hearing and
provide notice of the purpose of the hearing and the time, date, and
place of the hearing, published as required by IC 5-3-1, before the
school corporation may adopt a resolution under this section. At the
public hearing, the governing body must provide the following
information:
(1) The annual debt service payments, applicable debt service tax
rate, and total debt service payments for the bonds proposed to be
retired or refunded.
(2) The annual debt service payments, applicable debt service
fund tax rate, and total debt service payments for the proposed
refunding bonds.
(3) 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.
(e) If at least one (1) taxpayer appearing at the public hearing under
subsection (d) objects to the proposed resolution and files a written
objection with the governing body of the school corporation and the
county auditor not more than ten (10) days after the public hearing, a
petition requesting the application of a petition and remonstrance
process may be filed not more than thirty (30) days after the public
hearing by one hundred (100) persons who are either owners of
property within the school corporation or registered voters residing
within the school corporation. Except as provided in this subsection,
the provisions of IC 6-1.1-20-3.1(b) governing the initiation of a
petition and remonstrance process for a controlled project (including
the provisions governing verification of petitions) apply to a petition
under this subsection requesting the application of a petition and
remonstrance process. The following apply if a sufficient petition
requesting the application of a petition and remonstrance process has
been filed as set forth in this subsection:
(1) The petition and remonstrance process prescribed by IC 6-1.1-20-3.2(b) for controlled projects shall be used to determine
whether the governing body of the school corporation may adopt
a resolution under subsection (g) and issue refunding bonds as
provided in subsection (g).
(2) The governing body of the school corporation may not adopt
a resolution under subsection (g) and may not issue refunding
bonds as provided in subsection (g) unless more individuals sign
the petition for the bond refunding under this subsection than the
number of individuals signing a remonstrance against the bond
refunding under this subsection.
Except as provided in this subsection, the provisions of IC 6-1.1-20-3.2(b) governing the petition and remonstrance process for a
controlled project apply to a petition and remonstrance process under
this subsection.
(f) Except as provided in subsection (e), IC 6-1.1-20 does not apply
to bonds issued under this section.
(g) A school corporation that desires to be an eligible school
corporation under this section must, before January 1, 2019, and
notwithstanding any other law, adopt 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) 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 before January 1, 2009; and
(B) payment of redemption premiums and the costs of the
refunding.
(3) 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 a resolution under this section, the
governing body must publish notice of the adoption of the resolution
as required by IC 5-3-1.
(h) An eligible school corporation may issue refunding bonds as
permitted by this section. In addition, an eligible school corporation
may extend the repayment period beyond the repayment period for the
bonds that are being retired or refunded by the issuance of refunding
bonds. However, the repayment period may be extended only once for
a particular bond, and the extension may not exceed ten (10) years after
the latest maturity date for any of the bonds being retired or refunded
by the eligible school corporation under this section.
(i) Property taxes imposed by an eligible school corporation to pay
debt service for bonds permitted by this section shall be considered for
purposes of calculating the limits to property tax liability under Article
10, Section 1 of the Constitution of the State of Indiana and for
calculating a person's credit under IC 6-1.1-20.6-7.5. However,
property taxes imposed by an eligible school corporation through
December 31, 2019, to pay debt service for bonds permitted by this
section may not be considered in an eligible county, as used in Article
10, Section 1(h) of the Constitution of the State of Indiana, for purposes
of calculating the limits to property tax liability under Article 10,
Section 1 of the Constitution of the State of Indiana or for calculating
a person's credit under IC 6-1.1-20.6-7.5.

Legislative History

As added by P.L.229-2011, SEC.63. Amended by P.L.145-2012, SEC.1; P.L.257-2013, SEC.1; P.L.120-2014, SEC.1; P.L.244-2017, SEC.1; P.L.88-2018, SEC.1.