February 25, 2005
HOUSE BILL No. 1550
DIGEST OF HB 1550
(Updated February 22, 2005 1:56 pm - DI 92)
Citations Affected: IC 20-5.
Synopsis: School bonds for retirement expenses. Permits a school
corporation to issue bonds one time before January 1, 2006, to cover
retirement or severance liability if the school corporation did not issue
bonds for that purpose under a prior statute that has been repealed.
Permits a school corporation that issued bonds under the repealed
statute before April 14, 2003, to issue bonds one additional time before
January 1, 2006, in an amount not to exceed the difference between: (1)
the amount of the prior bond issue (which was formerly limited to 2%
of the school corporation's assessed value), and (2) 2% of the school
corporation's true tax value at the time of the prior bond issue. Requires
a school corporation that issues bonds for retirement or severance
liability to reduce the property tax levy for certain other funds of the
school corporation in an amount equal to the property tax levy needed
for debt service on the bonds.
Effective: Upon passage.
Ayres, Klinker, Thompson, Oxley
January 18, 2005, read first time and referred to Committee on Ways and Means.
February 24, 2005, reported _ Do Pass.
February 25, 2005
First Regular Session 114th General Assembly (2005)
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HOUSE BILL No. 1550
A BILL FOR AN ACT to amend the Indiana Code concerning
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 20-5-4-1.8; (05)HB1550.1.1. -->
SECTION 1. IC 20-5-4-1.8 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 1.8. (a) For purposes of this section,
"retirement or severance liability" means the payments
anticipated to be required to be made to employees of a school
corporation upon or after the termination of their employment by
the school corporation under an existing or previous employment
(b) This section applies to each school corporation that:
(1) did not issue bonds under IC 20-5-4-1.7 before its repeal;
(2) issued bonds under IC 20-5-4-1.7 before April 14, 2003.
(c) In addition to the purposes set forth in section 1 of this
chapter, a school corporation described in subsection (b) may issue
bonds to implement solutions to contractual retirement or
severance liability. The issuance of bonds for this purpose is
subject to the following conditions:
(1) The school corporation may issue bonds under this section
only one (1) time.
(2) The bonds must be issued before January 1, 2006.
(3) The solution to which the bonds are contributing must be
reasonably expected to reduce the school corporation's
unfunded contractual liability for retirement or severance
payments as it existed on June 30, 2001.
(4) The amount of the bonds that may be issued for the
purpose described in this section may not exceed:
(A) two percent (2%) of the true tax value of property in
the school corporation, for a school corporation that did
not issue 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
the school corporation as of the date that the school
corporation issued bonds under IC 20-5-4-1.7; minus
(ii) the amount of bonds that the school corporation
issued under IC 20-5-4-1.7;
for a school corporation that issued bonds under
IC 20-5-4-1.7 before April 14, 2003.
(5) Each year that a debt service levy is needed under this
section, the school corporation shall reduce the total property
tax levy for the school corporation's transportation, school
bus replacement, capital projects, or art association and
historical society funds in an amount equal to the property tax
levy needed for the debt service under this section. The
property tax rate for each of these funds shall be reduced each
year until the bonds are retired.
(6) The school corporation shall establish a separate debt
service fund for repayment of the bonds issued under this
(d) Bonds issued for the purpose described in this section shall
be issued in the same manner as other bonds of the school
(e) Bonds issued under this section are not subject to the petition
and remonstrance process under IC 6-1.1-20 or to the limitations
contained in IC 36-1-15.
SOURCE: ; (05)HB1550.1.2. -->
SECTION 2. An emergency is declared for this act.