Citations Affected: IC 36-9.
Synopsis: Borrowing for local public works. Allows a political
subdivision to borrow money to finance a public work project costing
not more than $2,000,000 by issuing a note to a financial institution.
Effective: July 1, 2004.
January 6, 2004, read first time and referred to Committee on Governmental Affairs and
Interstate Cooperation.
January 15, 2004, amended, reported favorably _ Do Pass.
A BILL FOR AN ACT to amend the Indiana Code concerning local
government.
SECTION 1. IC 36-9-41 IS ADDED TO THE INDIANA CODE AS
A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2004]:
Chapter 41. Financing of Public Work Projects by Political
Subdivisions
Sec. 1. This chapter applies to a public work project that will
cost the political subdivision not more than two million dollars
($2,000,000).
Sec. 2. As used in this chapter, "public work" means a project
for the construction of any public building, highway, street, alley,
bridge, sewer, drain, or any other public facility that is paid for out
of public funds.
Sec. 3. Notwithstanding any other statute, a political subdivision
may borrow the money necessary to finance a public work project
from a financial institution in Indiana by executing a negotiable
note under section 4 of this chapter. The political subdivision shall
provide notice of its determination to issue the note under IC 5-3-1.
Money borrowed under this chapter is chargeable against the
political subdivision's constitutional debt limitation.
Sec. 4. A political subdivision borrowing money under section
3 of this chapter shall execute and deliver to the financial
institution the negotiable note of the political subdivision for the
sum borrowed. The note must bear interest, with both principal
and interest payable in equal or approximately equal installments
on January 1 and July 1 each year over a period not exceeding six
(6) years.
Sec. 5. (a) The first installment of principal and interest on a
note executed under this chapter is due on the next January 1 or
July 1 following the first tax collection for which it is possible for
the political subdivision to levy a tax under subsection (b).
(b) The political subdivision shall appropriate an amount for
and levy a tax each year sufficient to pay the political subdivision's
obligation under the note according to its terms.
(c) An obligation of a political subdivision under a note executed
under this chapter is a valid and binding obligation of the political
subdivision, notwithstanding any tax limitation, debt limitation,
bonding limitation, borrowing limitation, or other statute to the
contrary.
Sec. 6. If a political subdivision gives notice under section 3 of
this chapter of its determination that money should be borrowed
under this chapter, not less than ten (10) taxpayers in the political
subdivision who disagree with the determination may file a petition
in the office of the county auditor not more than thirty (30) days
after notice of the determination is given. The petition must state
the taxpayers' objections and the reasons why the taxpayers
believe the borrowing to be unnecessary or unwise.
Sec. 7. (a) Upon receiving a petition under section 6 of this
chapter, the county auditor shall immediately certify a copy of the
petition, together with other data necessary to present the
questions involved, to the department of local government finance.
Upon receipt of the certified petition and other data, the
department of local government finance shall fix a time and place
for a hearing on the matter.
(b) The hearing shall be held not less than five (5) and not more
than thirty (30) days after the department's receipt of the certified
petition, and shall be held in the county where the petition arose.
(c) The department of local government finance shall give notice
of the hearing by letter to the political subdivision and to the first
ten (10) taxpayer petitioners listed on the petition. A copy of the
letter shall be sent to each of the first ten (10) taxpayer petitioners
at the taxpayer's usual place of residence at least five (5) days
before the date of the hearing. In addition, public notice shall be
published at least five (5) days before the date of the hearing under
IC 5-3-1.
(d) After the hearing under subsection (c), the department of
local government shall issue a final determination concerning the
petition.
Sec. 8. A:
(1) taxpayer who signed a petition filed under section 6 of this
chapter; or
(2) political subdivision against which a petition is filed under
section 6 of this chapter;
may petition the tax court established by IC 33-3-5-1 for judicial
review of the final determination of the department of local
government finance on the taxpayers' petition. The petition for
judicial review must be filed in the tax court not more than
forty-five (45) days after the date of the department's final
determination.