Introduced Version
HOUSE BILL No. 1059
_____
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)
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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.