Introduced Version






HOUSE BILL No. 1059

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DIGEST OF INTRODUCED BILL



Citations Affected: IC 21-2.

Synopsis: Transfer of money between school funds. Allows money to be transferred between the funds maintained by a school corporation. Repeals various provisions authorizing transfers of money from certain funds only to specific funds or under specific circumstances.

Effective: July 1, 2006.





Heim




    January 12, 2006, read first time and referred to Committee on Ways and Means.







Introduced

Second Regular Session 114th General Assembly (2006)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2005 Regular Session of the General Assembly.

HOUSE BILL No. 1059



    A BILL FOR AN ACT to amend the Indiana Code concerning education finance.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 21-2-4-2; (06)IN1059.1.1. -->     SECTION 1. IC 21-2-4-2, AS AMENDED BY P.L.246-2005, SECTION 183, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 2. The governing body of each school corporation in Indiana shall establish a debt service fund for the payment of:
        (1) all debt and other obligations arising out of funds borrowed or advanced for school buildings when purchased from the proceeds of a bond issue for capital construction;
        (2) a lease to provide capital construction;
        (3) interest on emergency and temporary loans;
        (4) all debt and other obligations arising out of funds borrowed or advanced for the purchase or lease of school buses when purchased or leased from the proceeds of a bond issue, or from money obtained from a loan made under IC 20-27-4-5, for that purpose;
        (5) all debt and other obligations arising out of funds borrowed to pay judgments against the school corporation;
        (6) all debt and other obligations arising out of funds borrowed to purchase equipment; or
        (7) all unreimbursed costs of textbooks for the school corporation's students who were eligible for free or reduced lunches in the previous school year.
The term "debt service" shall include but not be limited to lease rental obligations, school bonds and coupons and civil bond obligations assumed by school corporations reorganized pursuant to IC 20-23-4, and any interest cost on emergency and temporary loans but shall not include the repayment of the principal of the emergency and temporary loans obtained for benefit of any other fund. All receipts and disbursements authorized by law for school funds and tax levies for the lease rental fund, bond fund, sinking fund, civil bond obligation fund, and payment of interest on emergency and temporary loans shall be received in and disbursed from the debt service fund. The governing body may transfer the amount levied to cover unreimbursed costs of textbooks under subdivision (7) to the textbook rental fund or extracurricular account.
SOURCE: IC 21-2-11-4; (06)IN1059.1.2. -->     SECTION 2. IC 21-2-11-4, AS AMENDED BY P.L.246-2005, SECTION 186, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 4. (a) Any lawful school expenses payable from any other fund of the school corporation including without limitation debt service and capital outlay, but excluding costs attributable to transportation (as defined in IC 21-2-11.5-2), may be budgeted in and paid from the general fund. However, after June 30, 2005, and before July 1, 2007, a school corporation may budget for and pay costs attributable to transportation (as defined in IC 21-2-11.5-2) from the general fund.
    (b) In addition, remuneration for athletic coaches (whether or not they are otherwise employed by the school corporation and whether or not they are licensed under IC 20-28-4 or IC 20-28-5) may be budgeted in and paid from the school corporation's general fund.
    (c) This subsection applies only to the extent that the school corporation's transportation fund has not been increased under IC 21-2-11.5-3(b)(2) or another adjustment made by the department of local government finance to reflect the termination of state distributions for the school corporation's transportation fund. During the period beginning July 1, 2005, and ending June 30, 2007, the school corporation may transfer money in a fund maintained by the school corporation (other than the special education preschool fund (IC 21-2-17-1) or the school bus replacement fund (IC 21-2-11.5-2)) that is obtained from:
        (1) a source other than a state distribution or local property taxation; or
        (2) a state distribution or a property tax levy that is required to be deposited in the fund;
to any other fund. A transfer under subdivision (2) may not be the sole basis for reducing the property tax levy for the fund from which the money is transferred or the fund to which money is transferred. Money transferred under this subsection may be used only to pay costs, including debt service, attributable to reductions in funding for transportation distributions under IC 21-3-3.1, including reimbursements associated with transportation costs for special education and vocational programs under IC 21-3-3.1-4, and ADA flat grants under IC 21-3-4.5 (repealed). The property tax levy for a fund from which money was transferred may not be increased to replace the money transferred to another fund.
    (d) The total amount transferred under subsection (c) may not exceed the following:
        (1) For the period beginning July 1, 2005, and ending June 30, 2006, the last state transportation distribution (as defined in IC 21-2-11.5-3).
        (2) For the period beginning July 1, 2006, and ending June 30, 2007, an amount equal to the subdivision (1) amount.
SOURCE: IC 21-2-15-12; (06)IN1059.1.3. -->     SECTION 3. IC 21-2-15-12 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 12. (a) Interest on the capital projects fund, including the fund's pro rata share of interest earned on the investment of total money on deposit, shall be deposited in the fund. However, the governing body may adopt a resolution to transfer any interest earned on money on deposit in the capital projects fund to the school corporation's general fund.
    (b) A school corporation may transfer money to or from the capital projects fund under IC 21-2-11-4(c).
SOURCE: IC 21-2-22; (06)IN1059.1.4. -->     SECTION 4. IC 21-2-22 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2006]:
     Chapter 22. Transfer of Money Between Funds
    Sec. 1. As used in this chapter, "governing body" has the meaning set forth in IC 20-18-2-5.
    Sec. 2. As used in this chapter, "personal services" includes payments for salaries and wages to employees (either regular or temporary) of a school corporation, payments for compensation awards, and the employer's share of Social Security and Medicare taxes, health insurance, life insurance, dental insurance, vision

insurance, deferred compensation, leave conversion, and disability and retirement fund contributions.
    Sec. 3. As used in this chapter, "school corporation" has the meaning set forth in IC 36-1-2-17.
    Sec. 4. Subject to this chapter, the governing body of a school corporation may by resolution transfer money between the funds maintained by the school corporation.
    Sec. 5. After a transfer is made under this chapter, the money transferred from a fund is available only to the fund to which the money is transferred. This rule does not preclude a governing body from adopting a subsequent resolution under section 4 of this chapter to transfer the money again at a later time.
    Sec. 6. A school corporation may use money transferred under this chapter for any purpose of the fund to which the money is transferred.
    Sec. 7. (a) A transfer may not be made under this chapter if the transfer would:
        (1) adversely affect the repayment of any outstanding obligation;
        (2) breach any agreement with the holders of any outstanding obligation concerning the use of money in a fund or the amount of reserves that must be maintained by the school corporation;
        (3) use money that was received:
            (A) from a private donor or the federal government; and
            (B) on condition that it be used for a specific purpose;
        for any purpose other than the purpose for which it was received;
        (4) result in the failure to provide specific services that the school corporation agreed to provide as a condition of receiving money from any source;
        (5) result in an increase in any tax imposed by the school corporation to meet the obligations payable from the fund from which money is transferred; or
        (6) be used to directly or indirectly:
            (A) pay for; or
            (B) restore a balance in a fund or otherwise replace money used to directly or indirectly pay for;
        personal services or loans or other indebtedness incurred to pay for personal services.
    (b) A governing body may not make a transfer of money under this chapter from a self-insurance fund established under

IC 21-2-5.6-1 without the prior approval of the commissioner of the department of insurance.
    Sec. 8. A transfer under this chapter may not be considered for purposes of computing the school corporation's maximum permissible tax levy for the fund to which the transfer is made or tuition support distributions to be paid to the school corporation.

    SECTION 5. THE FOLLOWING ARE REPEALED [EFFECTIVE JULY 1, 2006]: IC 21-2-2; IC 21-2-4-8; IC 21-2-5.6-3; 21-2-11.5-6.