SB 105-3_ Filed 02/03/2011, 10:57 Charbonneau
Adopted 2/7/2011

SENATE MOTION


MADAM PRESIDENT:

    I move that Senate Bill 105 be amended to read as follows:

SOURCE: Page 3, line 15; (11)MO010502.3. -->     Page 3, line 15, delete "IC 5-1.5-8-5" and insert " IC 5-1.5-8-5.1".
    Page 3, line 28, delete "IC 5-1.5-8-5" and insert " IC 5-1.5-8-5.1".
    Page 3, line 35, delete "IC 5-1.5-8-5" and insert " IC 5-1.5-8-5.1".
    Page 3, line 37, delete "IC 5-1.5-8-5" and insert " IC 5-1.5-8-5.1".
    Page 5, between lines 5 and 6, begin a new paragraph and insert:
SOURCE: IC 5-1.5-8-5.1; (11)MO010502.4. -->     "SECTION 4. IC 5-1.5-8-5.1 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 5.1. (a) Upon receiving notice from the bank that a qualified entity has failed to pay the principal or interest on the securities of the qualified entity then held or owned by or arising from an agreement with the bank when due, the treasurer of the state shall:
        (1) reduce the amount of any revenues or other money or property held, possessed, maintained or controlled by, or otherwise in the custody of, the state, or any department, agency or instrumentality thereof, which would otherwise be available for distribution to the qualified entity under any other law, by an amount equal to the amount of the qualified entity's unpaid securities;
        (2) pay the amount by which the revenues or other money or property are reduced under subdivision (1) to the bank for the purpose of paying principal of and interest on bonds or other obligations of the bank; and
        (3) notify the qualified entity that these revenues or other money or property, which would otherwise be available for distribution to the qualified entity, have been reduced by an amount necessary to satisfy all or a portion of the qualified entity's unpaid securities to the bank.
    (b) A reduction under subsection (a) must be made:
        (1) first, from distributions of county adjusted gross income tax distributions under IC 6-3.5-1.1, county option income tax distributions under IC 6-3.5-6, or county economic development income tax distributions under IC 6-3.5-7 that would otherwise be distributed to the county under the schedule in IC 6-3.5-1.1-10, IC 6-3.5-1.1-21.1, IC 6-3.5-6-16,

IC 6-3.5-6-17.3, IC 6-3.5-7-17, and IC 6-3.5-7-17.3; and
        (2) second, from any other revenues or other money or property held, possessed, maintained or controlled by, or otherwise in the custody of, the state, or any department, agency or instrumentality of the state, which would otherwise be available for distribution to the qualified entity under any other law.
    (c) Any reductions under subsection (a) may be used only for the purpose of paying principal of and interest on the debt service obligations of the qualified entity which the qualified entity has failed to pay to the bank and for no other purpose.
    (d) Notwithstanding any other law, a qualified entity has no legal or equitable right to any revenues or other money or property held, possessed, maintained, controlled or otherwise in the custody of the state or any political subdivision, or any department, agency, or instrumentality of the state, that would otherwise be available for distribution to the qualified entity, until:
        (1) any reduction permitted under this section have been applied; and
        (2) the revenues or other money or property have been distributed to and received by the qualified entity.
    (e) However, the reduction of payment from the qualified entity and payment to the bank under this section may not adversely affect the validity of the security in default.
    (f) This section shall be interpreted liberally so that the state shall, to the extent permitted by law, ensure that the debt service obligations of each qualified entity are paid when due. However, this section does not create a debt of the state or any political subdivision.
".

SOURCE: Page 11, line 10; (11)MO010502.11. -->     Page 11, between lines 10 and 11, begin a new paragraph and insert:
SOURCE: IC 6-1.1-20.6-10; (11)MO010502.14. -->     "SECTION 14. IC 6-1.1-20.6-10, AS ADDED BY P.L.146-2008, SECTION 226, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 10. (a) As used in this section, "debt service obligations of a political subdivision" refers to:
        (1) the principal and interest payable during a calendar year on bonds, notes, or warrants; and
        (2) lease rental payments payable during a calendar year on leases;
of a political subdivision payable from ad valorem property taxes.
    (b) Political subdivisions are required by law to fully fund the payment of their debt obligations in an amount sufficient to pay any debt service or lease rentals on outstanding obligations, regardless of any reduction in property tax collections due to the application of tax credits granted under this chapter. Any reduction in collections must be applied to the other funds of the political subdivision after debt service or lease rentals have been fully funded.
    (c) Upon the failure of a political subdivision to pay any of the political subdivision's debt service obligations during a calendar year when due, the treasurer of state, upon being notified of the failure by a claimant, shall pay the unpaid debt service obligations that are due from money in the possession of the state that would otherwise be available for distribution to the political subdivision under any other

law, deducting the payment from the amount distributed. A deduction under this subsection must be made:
        (1) first from distributions of county adjusted gross income tax distributions under IC 6-3.5-1.1, county option income tax distributions under IC 6-3.5-6, or county economic development income tax distributions under IC 6-3.5-7 that would otherwise be distributed to the county under the schedule in IC 6-3.5-1.1-10, IC 6-3.5-1.1-21.1, IC 6-3.5-6-16, IC 6-3.5-6-17.3, IC 6-3.5-7-17, and IC 6-3.5-7-17.3; and
        (2) second from any other undistributed funds of the political subdivision in the possession of the state.
    (c) Upon receiving notice from any creditor that a political subdivision has failed to pay any of the political subdivision's debt service obligations during a calendar year when due, the treasurer of the state shall:
        (1) reduce the amount of any revenues or other money or property held, possessed, maintained or controlled by, or otherwise in the custody of, the state, or any department, agency, or instrumentality of the state, which would otherwise be available for distribution to the political subdivision under any other law, by an amount equal to the amount of the political subdivision's unpaid debt service obligations;
        (2) pay the amount by which these revenues or other money or property are reduced under subdivision (1) to the creditor; and
        (3) notify the political subdivision that the revenues or other money or property, which would otherwise be available for distribution to the political subdivision, have been reduced by an amount necessary to satisfy all or a portion of the political subdivision's unpaid debt service obligations.
    (d) A reduction under subsection (c) must be made:
        (1) first, from distributions of county adjusted gross income tax distributions under IC 6-3.5-1.1, county option income tax distributions under IC 6-3.5-6, or county economic development income tax distributions under IC 6-3.5-7 that would otherwise be distributed to the county under the schedule in IC 6-3.5-1.1-10, IC 6-3.5-1.1-21.1, IC 6-3.5-6-16, IC 6-3.5-6-17.3, IC 6-3.5-7-17, and IC 6-3.5-7-17.3; and
        (2) second, from any other revenues or other money or property held, possessed, maintained or controlled by, or otherwise in the custody of, the state, or any department, agency or instrumentality thereof, which would otherwise be available for distribution to the political subdivision under any other law.
    (e) Any reductions under subsection (c) must be used only for the purpose of paying principal of and interest on the debt service obligations of the political subdivision which the political subdivision has failed to pay and for no other purpose.
    (f) Notwithstanding any other law, a political subdivision has no legal or equitable right to any revenues or other money or property

held, possessed, maintained, controlled or otherwise in the custody of the state or any political subdivision, or any department, agency, or instrumentality of the state, that would otherwise be available for distribution to the political subdivision, until:
        (1) any reduction permitted under the provisions of this section have been applied; and
        (2) the revenues or other money or property have been distributed to and received by the political subdivision.

    (d) (g) This section shall be interpreted liberally so that the state shall to the extent legally valid permitted by law ensure that the debt service obligations of each political subdivision are paid when due. However, this section does not create a debt of the state or any political subdivision.
     (h) Notwithstanding this section, the payment of any reduction under subsection (c) to a creditor may not adversely affect the validity of the debt service obligations with respect to which the creditor has notified the treasurer of the state under this section.

SOURCE: IC 20-48-1-11; (11)MO010502.15. -->     SECTION 15. IC 20-48-1-11, AS AMENDED BY P.L.146-2008, SECTION 525, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 11. (a) As used in this section, "debt service obligations" refers to the principal and interest payable during a calendar year on a school corporation's general obligation bonds under IC 20-48-1-1, IC 20-48-1-2, and a school corporation's lease rentals under IC 20-47-2 and IC 20-47-3, and a school corporations tax anticipation warrants under IC 30-48-1-9.
    (b) Before the end of each calendar year, the department of local government finance shall review the bond and lease rental levies, or any levies that replace bond and lease rental levies, of each school corporation that are payable in the next succeeding year and the appropriations from the levies from which the school corporation is to pay the amount, if any, of the school corporation's debt service obligations. If the levies and appropriations of the school corporation are not sufficient to pay the debt service obligations, the department of local government finance shall establish for each school corporation:
        (1) bond or lease rental levies, or any levies that replace the bond and lease rental levies; and
        (2) appropriations;
that are sufficient to pay the debt service obligations.
    (c) Upon the failure of a school corporation to pay any of the school corporation's debt service obligations during a calendar year when due, the treasurer of state, upon being notified of the failure by a claimant, shall pay the unpaid debt service obligations that are due from the funds of the state only to the extent of the amounts appropriated by the general assembly for the calendar year for distribution to the school corporation from state funds, deducting the payment from the appropriated amounts. A deduction under this subsection must be made:
        (1) first from all funds except state tuition support; and
        (2) second from state tuition support.
     (c) Upon receiving notice from any creditor that a school

corporation has failed to pay any of the political subdivision's debt service obligations during a calendar year when due, the treasurer of the state shall:
        (1) reduce the amount of any revenues or other moneys or property held, possessed, maintained or controlled by, or otherwise in the custody of, the state, or any department, agency or instrumentality of the state, which would otherwise be available for distribution to the school corporation under any other law, by an amount equal to the amount of the school corporation's unpaid debt service obligations;
        (2) pay the amount by which these revenues or other moneys or property are reduced under subdivision (1) to the creditor; and
        (3) notify the school corporation that the revenues or other moneys or property, which would otherwise be available for distribution to the school corporation, have been reduced by an amount necessary to satisfy all or a portion of the school corporation's unpaid debt service obligations.
    (d) A reduction under subsection (c) must be made:
        (1) first, from any revenues or other moneys or property held, possessed, maintained or controlled by, or otherwise in the custody of, the state, or any department, agency or instrumentality of the state, which would otherwise be available for distribution to the school corporation under any other law, except state tuition support; and
        (2) second from state tuition support.
    (e) Any reductions under subsection (c) may be used only for the purpose of paying principal of and interest on the debt service obligations of the school corporation which the school corporation has failed to pay and for no other purpose.
    (f) Notwithstanding any other law, a school corporation has no legal or equitable right to any revenues or other money or property held, possessed, maintained, controlled or otherwise in the custody of the state or any political subdivision, or any department, agency or instrumentality of the state, that would otherwise be available for distribution to the school corporation, until:
        (1) any reduction permitted under the provisions of this section have been applied; and
        (2) the revenues or other money or property have been distributed to and received by the school corporation.

    (d) (g) This section shall be interpreted liberally so that the state shall to the extent legally valid permitted by law ensure that the debt service obligations of each school corporation are paid. However, this section does not create a debt of the state or any political subdivision.
     (h) Notwithstanding this section, the payment of any reduction under subsection (c) to a creditor may not adversely affect the validity of the debt service obligations with respect to which the creditor has notified the treasurer of the state pursuant to this section.".

SOURCE: Page 11, line 12; (11)MO010502.11. -->     Page 11, line 12, after "2011]:" insert " IC 5-1.5-8-5;".
    Renumber all SECTIONS consecutively.
    (Reference is to SB 105 as printed January 28, 2011.)


________________________________________

Senator Charbonneau


MO010502/DI 106     2011